By Cedric Land, Contributor, USDR.
This past week China choose to crack down on the Bitcoin and shut down the Chinese Bitcoin exchange limiting the ability for Chinese citizen to exchange their Bitcoins for currency. The Chinese government’s main concern with Bitcoins was with their ability to control the currency and track its users due to the currencies anonymity factor and of course a Communist system requires control over its citizens which Bitcoins threaten. Within China there were almost no companies that accept Bitcoin on the open marketplace, so then why would companies or citizens want to engage in BItcoin mining? It gives those who are mining the currency the ability to acquire precious metals from outside the country giving the average company more solvencies and the ability to earn untraceable earnings with little to no manpower involved thus bypassing the government’s ability to tax those untraceable earnings. For the average citizen it offered the opportunity to increase ones average monthly earnings by 30% with an average computer, with some investment it allowed a citizen to double their monthly income; yet again without the government’s ability to track the increased earnings.
In the US there has been a tapering of Bitcoin mining because the cost of mining was no longer justified considering that as the difficulty increased the average Bitcoin miner in the developed countries has decreased. At the same point in time as mining tapered in the developed nations it exploded in the third world nations and in the past 5 months a majority of the worlds mining has been occurring in China and Brazil. The ability of the middle class to double their monthly income has increased the Bitcoin marketplace in the third world and has brought a currency that was nothing more than a novelty in the developed world to be such a monetary competitor that the Chinese Government has tried to shut it down in part because they view it as a danger to the Yuan. Even though the Chinese Government has been effective in shutting down Chinas primary Bitcoin exchange site, which has caused the Bitcoin to crash and drop from a high of $1000 to the mid $400’s this will not be the end of the cryptocurrency. As we have seen in the past with the Chinese citizens getting around China’s internet censorship we will see the Chinese citizens get around the governments intervention yet again especially since there is money involved.
Born in Houston, Texas to an American father and German mother, Cedric is both a German and US citizen. He holds a degree in mechanical engineering from Prairie View A&M university and owns a resale business. Cedric spends most of his vacation days in Europe, and his free time is spent enriching himself in the latest technology. By day, he works as a Business & Systems Integration Analyst. As a columnist, his main focus is on European affairs and technology. He can be found on Facebook or LinkedIn.