The recovery of the bitcoin hash rate, the continuation of trading in peer-to-peer markets, and the significant volume of transactions in Asian exchanges show that China’s efforts to ban bitcoin have so far been ineffective.
to the Report Coin Telegraph, Bitcoin may have been the target of the biggest concerted attack in its history in the last few months, yet the investing community has not yet given up. China has explicitly banned mining in most parts of the country after a two-week deadline for bitcoin miners expired. This led to the biggest bitcoin network hardness correction after a 50% reduction in hash rate.
Market sentiment towards bitcoin was eroded after Tesla announced that Tesla would no longer accept bitcoin in its payments due to the environmental consequences of the mining process. It is unknown at this time what he will do after leaving the post.
A few weeks later, on June 16, Blockchained the display of results related to digital currency exchanges on search engines. Meanwhile, the Huobi exchange, which supports transactions in digital currency derivatives, imposed restrictions on leveraged transactions and stopped accepting new Chinese users.
Finally, on June 21, the People’s Bank of China ordered all banks in the country to close their OTC accounts, and even their social media accounts were blocked. OTC tables in China act as gateways for Fiat currencies to enter, and without them, converting bitcoins to stable coins is difficult.
Following these developments, some analysts have tended to describe these tactics as nothing more than fear, uncertainty, and skepticism, but looking back, it seems that China has prepared a planned attack on the Bitcoin network and the mining industry. Is.
The short-term impact of China’s bans can be seen as moderately successful, as it pushed down the price of bitcoin and raised concerns about a 51 percent strike.
However, in the end, the Chinese attack failed, and in the continuation of this article, reasons are provided to prove this defeat.
Bitcoin hash rate returns
Bitcoin network hash rate, a measure of total network extraction power, began to decline after reaching a peak of 186 million per second (TH / s) on May 12th. This happened in the first few weeks due to restrictions imposed on areas that used coal to supply their energy needs. It is estimated that 25% of the total bitcoin mining was in these areas.
However, as restrictions spread to other areas, the index reached 85 million per second, the lowest level in two years.
As the data in the chart above shows, the bitcoin network processing power has reached 100 million per second (TH / s) again in less than three weeks. Some miners successfully shipped their equipment to Kazakhstan, while others shipped it to Canada and the United States.
Peer-to-peer trading continues
Although companies involved in digital currency transactions are banned in China, individuals continue to work as intermediaries. According to data obtained from the internal rating system of exchanges, some of these individuals have recorded more than 10,000 successful peer-to-peer transactions.
Hobby and Bainance exchanges both have similar markets where users can trade several digital currencies, including Tetra. After converting Fiat currencies to stable coins, it is possible to trade in a regular exchange or derivatives market.
Asian trading volume is still high
It seems that the Chinese authorities have imposed complete restrictions on digital currency transactions, as well as exchanges such as Bainance, OKEx and Hubei, which previously operated in the country. However, the data on the recent transactions of these exchanges do not show a significant effect.
Note that the three Asian exchanges are in the top ranks while the trading volume of Coin Base, Cracken and Bitfinex is not even close to them.
The ban on bitcoin mining and trading in China may have caused temporary disruptions and negative effects on the price of this digital currency, but so far the network and price criteria have been restored better than expected.
There is currently no way to measure OTC transactions in which larger blocks are traded, but this will only continue until intermediaries find new inputs and payment methods.