Bitcoin mining shift to renewable energy and China's crack down on the shadow economy

in LeoFinance2 months ago (edited)

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Renewable energy is central to cryptocurrancy debate at current with the primary focus on transitioniong the heavy fossil fuel dependent sector to a more sustainable form of power use.

Debate has been big on the topic with many supportive and against information provided by researchers on the CO2 emissions and energy sources being used to mine Bitcoin. Regardless of the discussion it is adamantly clear that China will be moving towards a renewable energy sector and it is focusing Bitcoin.

It also coincides with its own digital Yuan which was recently launched and has been widely accepted amongst Chinese nationals with wide spread adoption and ability to spend the digital currency within China.

China's Shadow Economy

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It wasn't too long ago that China's economy grew to be the second largest behind the US. Much of China's approach has been laissez faire towards its economy. Not wanting to inhibit growth and economic development it stayed away from strict regulations. But with all things finance tax evasion is a problem no matter the economic or governance system employed. Under capitalism, socialism or communism the same problems of wealth distribution and tax evasion manifest.

In the 2008 economic crisis Beijing left much of the shadow economy alone as it supported the economic growth and provided much needed stimulus in a global recession. But as time has moved on China's own central bank has expressed concern over the magnitude of tax evasion underway.

Illegal gambling alone is costing the nation $US145Billion annually and a recent investigation of over 150 financial crimes netted Beijing $US14Billion in unpaid tax. You can read more about China's digital Yuan and white paper Here including current global thoughts. It's a really good article that covers alot of topics (long read).

China's Debt worries

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Guo Shuquing, Chairman of China's Banking Regulatory Commission (BRC) noted that China's Debt has soard to 30% due to the current COVID19 pandemic. Guo stated that to lower the debt the nation will need to focus deleveraging this year with a possibility of bankrupting Chinese firms. You can read more about it Here

Opinion: I don't perceive 30% Debt as a bad debt ration in fact many western and European nations will hit this comfortably. My personal opinion is that risk wouldn't start creeping into most people's minds until the 35% mark. This is for government debt, personal debt is another issue. 30% personal debt is probably Max you'd want to go anything above that starts to significantly impact the economy and lock spending.

China's current focus is on the Shadow economy and regaining ground. My opinion is that Bitcoin will enable China to do this. It's publicly open and transparent exchange records provide an ability for governments to track exchanges and transfers disabling the anonymous transfer and spending of money.

It's move into the digital economy with its own central bank issues Yuan puts it in competition with Bitcoin. The digital Yuan will enable tracking of its economy and the ability to better plan for trends and tackle tax evasion enabling China to regain its control of its financial issues.

A move that we can expect many nations to take, we are seeing this emerge in the US and Australia with a focus on tax departments tracking entry and exit points of fiat currencies and then following the transaction ids across block chains to assess gains and losses and ensure people are paying tax and not engaging in illegal activity.

China's announcement that it will be tackling Bitcoin miners had an immediate impact.

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As seen on many of the Bitcoin mining data farms, the hash rate of Bitcoin immediately began to alter. The hash rate reduced meaning alot of miners have exited bitcoin mining as they prepare for China's regulatory bodies to make change on how mining can be undertaken.

Thoughts and opinions

From what's being reported I don't think China is in anyway moving to outlaw Bitcoin or to prevent people mining it. China has a two tiered system a Communist and neo liberal system which over lap.

This latest move appears to be more China repositioning itself and reclaiming some lost ground to the Shadow economy.

China is also quite big in public perception and focusing on targets. As the world moves to meet net 0 carbon emissions this is a target that China too is seeking to meet.

All its upcoming environmental and energy summits have a primary focus on bringing people together to decrease its carbon footprint and become a 0 CO2 emissions nation.

Environmental impacts are a major concern for everyone and I think all these changes will lead to advancement in technology that produces mining equipment that is more energy efficient as well as an increase in renewable energy supplies.

The challenge faced by many people and governments around the world is that if bitcoin doesn't remain and the market reacts to a more greener block chain then tax payer money wasted on developing tech is just that, waste.

But I'm keen to see the advancement in this space and I think China is on the right path to tackle a range of its economic and emissions problems.

What are your thoughts?

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Posted Using LeoFinance Beta


Communism doesn't use money to value things more than people.
It's antithetical to putting people first.

Are you getting this fud, too?
Or, is it just for domestic consumption here?

I am fully aware. Our idiotic Feds are inciting China. They're confidence is based in US Air force carriers and bases on our continent.

A grown up version of "stop holding me back bro"

A grown up version of "stop holding me back bro"

Yeah, one with real world consequences.

I don't think I'd place too much faith in the united snakes' ability to project power very long.

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