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Why are Bitcoins from China, But Most of Them are Sold to the United States?

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Bitcoin China

It is not difficult for people who care about Bitcoin recently to find that Bitcoin has risen and fallen. In just a few months, Bitcoin has risen gratifyingly. But, will it exceed $100,000, or even millions of dollars? From July 2020 to March 2021, Bitcoin once exceeded $60,000. And now Musk announced that it would buy 1.5 billion U.S. dollars of Bitcoin on behalf of Tesla. China’s Meitu Company also announced a high-profile purchase of 260 million yuan in Bitcoin this year.

China accounts for 2/3 of the world’s bitcoins produced by “mining.” When it comes to the production of Bitcoin, it is “digging” through the endless calculations of high-performance computers 24 hours a day. In this process, hundreds of miners with super graphics cards and high-performance CPUs must work simultaneously, that is, miners. The environmental requirements of Antminer are mostly professional venues with sufficient ventilation, suitable temperature and suitable humidity. and stable power resources, and specific management personnel.

Related: How Does Bitcoin Mining Work?

Why is China suitable for Bitcoin mining?

There are two reasons for this. The first is that China’s electricity bills are cheap. Since China’s Sichuan Province has sufficient hydropower and Inner Mongolia’s coal power generation costs are low, the initial Bitcoin mining was chosen in these places. Second, the early stage was also due to supervision. Ineffective, there are behaviours of generating electricity or stealing electricity to conduct mining. Later, under formal supervision, the electricity bills generated by miners were also relatively cheap.

The second point is that China is a global producer of electronic products and can purchase the same quality mining equipment at a lower price.

If China can produce such a massive amount of Bitcoin, why should it be banned?

Compared with traditional currencies, it is guaranteed by the government. And currencies such as the U.S. dollar and RMB are recognized worldwide, mainly because there is a strong country behind it, so people will choose to believe it, and people will use it if they believe it. However, digital currency has even erased the link of state guarantees so that everyone thinks it is unreliable.

Then why did Bitcoin appear? The emergence of it is precisely because of the distrust of the guarantor. Even if the guarantor is a country or government, People who own Bitcoin are not at ease. The reason for this problem is mainly because the 2008 financial crisis had too much impact. Which made many people see the uncontrollable inflation and bubble economy, and caused many people to be destroyed.

Here is a feature of cryptocurrency: decentralization. What does it mean? This requires us to understand the guarantee just mentioned entirely. The state and government guarantee currency. In other words, the currency is a kind of evidence that proves the transaction process between you. Bitcoin does not need to pass the guarantor, nor need to record, let alone unified evidence. Its method is straightforward. When every transaction is carried out, it is broadcast to everyone, and every Bitcoin transaction allows everyone to know.

Related: Top 4 Cryptocurrency Investment Mistakes You Shouldn’t Make

Therefore, everyone has become a bookkeeper, and everyone will have such an account in their heart, recording everyone’s transactions, and reflecting it from another perspective. Everyone has become the centre of this transaction, and only if every Individual has become the centre of this transaction, and there is no centre. This is decentralization. But this also requires a prerequisite: there must be enough people in the Bitcoin transaction circle, and enough people are willing to believe in this transaction method. On the contrary, Bitcoin will not exist.

Why should China ban Bitcoin? According to public data, since January this year, Master has made a profit of 930 million yuan by purchasing Bitcoin. This income is more than he earned from buying a car for a whole year. What about such a huge profit? Can you not be jealous? Therefore, in the future, the ups and downs of bitcoin will directly affect the performance of many listed companies, affecting the world’s financial structure.

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China and the United States do not want Bitcoin to exist and want to ban Bitcoin. Due to different regulatory systems, the United States cannot ban the use of Bitcoin like in China. Therefore, the United States has chosen a completely different path, which is to firmly grasp Bitcoin in the country’s hands and achieve the purpose of control through monopoly. Whether it can be firmly controlled and whether it will impact the U.S. dollar, I believe even the United States cannot guarantee it, and they can only control it as much as possible.

The reason why Bitcoin is banned is due to the impact above on the country’s existing currency. After all, Bitcoin is a virtual currency, which provides a natural venue for criminals to launder money. The most crucial point is that Bitcoin is not a currency issued by the country. Once it is linked with the national currency, an uncontrollable phenomenon will occur, which will seriously impact the country’s economic system.

 

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