While some countries, especially China, take drastic measures against Bitcoin mining, causing mining activities to stop, some countries such as El Salvador are making plans to increase the use and production of Bitcoin.
According to the information compiled by the AA correspondent, Bitcoin, which is the most popular among cryptocurrencies with a market cap of over $640 billion, has faced increasing interest from both investors and miners over the years. After this interest, there has been a serious loss of value in Bitcoin in recent months. The crypto money, which saw its historical peak with 63 thousand dollars in April, has been trading at 30 thousand levels in recent weeks.
Experts state that the decisions taken to restrict Bitcoin mining, especially in China, play an important role in this loss of value in Bitcoin. The Chinese government announced last month that it will implement drastic measures to restrict Bitcoin mining in the country, which will reduce carbon emissions and protect the country’s financial system. When China’s local financial institutions and payment systems were banned from offering cryptocurrencies, Bitcoin lost more than 12 percent.
What do China and UK decisions mean on Bitcoin mining?
The fact that China is the country where more than half of Bitcoin mining takes place has caused these drastic measures to negatively affect mining activities. According to international sources, many Bitcoin miners stopped their activities after the decision.
In addition to mining activities, various restrictions on cryptocurrency trading are also on the agenda. The British Financial Management Authority (FCA) announced last week that Binance, the world’s largest cryptocurrency exchange, is restricting its activities in the UK and that this exchange cannot carry out any regulated activities in the country. The FCA similarly stated in January that cryptocurrencies pose an extremely high level of risk.
This practice in the UK was among the factors affecting Bitcoin as both Binance is the largest cryptocurrency exchange and Bitcoin is the most traded cryptocurrency.
EL SALVADOR CALLS FOR MINING WORK BY LEGALIZING BITCOIN
Despite these developments that “negatively” affected the trading and mining of cryptocurrencies in various countries, especially China, the Central American country El Salvador became the first country in the world where digital money was officially accepted after legalization. Cryptocurrency Bitcoin is in parliament with the decision taken this month.
El Salvador’s President Nayib Bukele, in his statement on his social media account, stated that 70 percent of the population does not have access to financial services, and that the population without a bank account will have financial opportunities thanks to cryptocurrencies. Bukele stated that after the Bitcoin decision, El Salvador will turn into one of the most important crypto money centers in the world.
Noting that El Salvadorans living abroad send 6 billion dollars annually to their countries, Bukele noted that they will facilitate money transfer thanks to Bitcoin and that more than one million low-income families will benefit from the exchange.
Also in El Salvador, the administration has called for the use of geothermal energy for Bitcoin mining.
THE SHARE OF THE USA, CANADA, SWEDEN AND ARGENTINA IN BITCOIN MINING IS EXPECTED TO INCREASE
These global developments for Bitcoin not only affect the value of Bitcoin, but also affect the “hash rate”, which is the unit of measurement of the processing power of the Bitcoin network. Bitcoin’s hash rate slumped to a 13-month low after the sharp drop in mining activity in China.
According to data from Blockchain.com, the Bitcoin hash rate, which was 180.6 TH/s on May 14, was 90.8 TH/s yesterday. This decline revealed the impact of the developments in Bitcoin in recent weeks on the hash rate. Similar to the hash rate, the total number of confirmed transactions per day has also been affected by Bitcoin-related developments. At the beginning of 2021, over 400 thousand confirmed transactions were processed on the Bitcoin network per day, while these days there are 200 thousand transactions.
Although the value of Bitcoin is generally followed by the public, the change in indicators such as the “hash rate” reveals the role of the policies and decisions taken in shaping the crypto money balances on a macro scale.
According to the news on Bloomberg.com, China’s 65 percent share in Bitcoin mining, which took drastic measures in crypto money mining, fell below 50 percent at the end of the year; The share of the USA, Canada, Sweden and Argentina is expected to increase.
Hello there! My name is Oktay from Tokensboss editors. I introduce myself as a business graduate and writer. I have been doing research on cryptocurrencies and new business lines for over 2 years.