No money in bitcoin mining
Representations of virtual cryptocurrencies are seen in this illustration taken November 28, MOSCOW, Jan 20 Reuters - Russia's central bank on Thursday proposed banning the use and mining of cryptocurrencies on Russian territory, citing threats to financial stability, citizens' wellbeing and its monetary policy sovereignty. The move is the latest in a global cryptocurrency crackdown as governments from Asia to the United States worry that privately operated and highly volatile digital currencies could undermine their control of financial and monetary systems. Russia has argued for years against cryptocurrencies, saying they could be used in money laundering or to finance terrorism.
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- Bitcoin ban?
- This 19-year-old earns $54,000 a year mining bitcoin as a full-time job — here's what it's like
- Fake Cryptocurrency Mining Apps Trick Victims Into Watching Ads, Paying for Subscription Service
- Tax Impact on Bitcoin and Cryptocurrency Investment
- Bitcoin mining in India: A profitable venture?
- Cryptocurrency
Bitcoin ban?
The new rules are not specifically targeted at crypto: They are intended to rein in all energy intensive industries Inner Mongolia was the only province to fail a central government review of energy consumption last year. Aside from crypto mining, they will also limit PVC, steel, coke, and methanol production. And miners need a lot of electricity: The bitcoin economy uses more electricity annually than the whole of Argentina, according to analysis by researchers at Cambridge University.
Chinese crypto miners can still find cheap electricity, some of it from hydropower in Sichuan and Yunnan, but they face many other challenges, mostly from government regulation and an ill-defined legal status. The government control is surprisingly recent: From the invention of bitcoin in until , the Chinese government did not regulate cryptocurrencies at all, and a thriving bitcoin economy began in China, including mining, ICOs initial coin offerings , online wallets, and cryptocurrency exchanges.
But later in , the government began to pressure cryptocurrency exchanges, ban ICOs, and scrutinize all cryptocurrency businesses and transactions.
New regulations slowed down and shrank the market for bitcoin, but they did not make mining, owning, buying, or selling cryptocurrencies illegal. In fact, Chinese law specifically protects virtual private property, and this includes virtual money. As far back as , Chinese courts have accepted and protected virtual items — including swords! Furthermore, the government has encouraged and incentivized Chinese companies to develop blockchain technology, which is the foundation of bitcoin.
The government is also using blockchain in its experiments with digital yuan , and various local governments have encouraged bitcoin mining as a way to attract investment and create jobs.
People in the crypto industry like Gieno Miao, the former miner and crypto entrepreneur, remain bullish. However, the legal status of the entire crypto industry remains unclear. China-based crypto exchanges and ICOs are clearly prohibited, but many other parts of the industry including mining are subject to incentives and disincentives by local and central government organizations alike.
Specifically, will the miners of bitcoin and other cryptocurrencies in China be able to stay in business? There are more than , miners in China, according to Sohu News in Chinese. Most miners are now big players, either owning whole factories filled with mining computers, or buying machines and then contracting them out to factories to house and maintain.
Home-based and small commercial miners are few. Machines in the factories are usually connected to mining pools which allow miners to share their computational resources to make the mining more efficient. Miao blamed those failures on outsiders rushing into the mining industry without an understanding of bitcoin or long-term plans for their investments. Nonetheless, in China as across the world, cryptocurrencies and blockchain are marching to respectability, and established financial players are entering the game.
The computers you need to mine crypto — mining rigs — have powerful and expensive technologies at their heart, usually graphics processing units GPUs or application-specific integrated circuits ASICs. Big players need hundreds of these mining machines, which are in such demand that customers need to join wait lists to be eligible to purchase. Demand is so high right now that there are waiting times of around half a year, but many Chinese bitcoin veterans know how to use their social connections, sometimes incentivized with additional fees, to jump the queues.
In the U. A high-rate machine consumes 3. Dong Wu, a manager of a company that mines Bitcoin, Ethereum, and Filecoin, told SupChina that electricity is his biggest cost. Miao put some numbers on it, saying that some factories pay several millions of dollars a month for juice. A final hurdle that Chinese crypto miners have to surmount: When the government put Chinese cryptocurrency exchanges out of business, it became difficult to legally buy or sell virtual money with yuan.
So holders of Chinese crypto have to do some of their business abroad if they want to exchange their coins for yuan through OTC over-the-counter markets operated outside of China. These include Huobi and Binance — both founded in China but now with legal bases in the U. The Chinese government clearly wants to maintain tight control over all aspects of cryptocurrencies, from their energy use to their potential risk to the financial system.
But crypto veteran Gieno Miao insisted that the government was still generally positive, mentioning three places that lend support: the provinces of Yunnan and Sichuan, and the city of Hangzhou.
Chinese journalist Colin Wu, who writes at WuBlockchain in Chinese , told SupChina that the government neither supports nor suppresses the crypto mining industry at a national level, but some county and city governments support it if it can create jobs and grow the local economy.
There is very little publicly available information about the finances of Chinese mining companies. As with nearly every other product on earth, as long as there is demand, Chinese manufacturers will step up to meet it.
Chinese crypto mining is here to stay. She is a fan of cooking, tennis and traveling. Read more. Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information. Performance cookies are key in allowing web site screens and content to load quickly on all types of devices.
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Extended Navigation Search Search. Columns Window on Xinjiang by Darren Byler. Featured Podcast Episode. Featured Event. Frida Qi Published March 9, Illustration by Derek Zheng. A new boom despite murky legal status However, the legal status of the entire crypto industry remains unclear. Who mines crypto in China? But mining still requires a lot of hustle. Miners need to be willing to cut deals The computers you need to mine crypto — mining rigs — have powerful and expensive technologies at their heart, usually graphics processing units GPUs or application-specific integrated circuits ASICs.
Bitcoin mining machines in Sichuan Province in Photo provided to SupChina by a source who asked to not be named. Electricity bills are another major challenge for miners. How much money do Chinese crypto miners make? Suggested for you. The two Chinese government moves that spooked the bitcoin market Jeremy Goldkorn.
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This 19-year-old earns $54,000 a year mining bitcoin as a full-time job — here's what it's like
Nick Sears was 17 when he helped build a bitcoin mining farm in Dallesport, Washington. He was 18 when rules allowed him to buy bitcoin for the first time. And now, at 19, Sears has doubled down on his life as a bitcoin miner, saying "no" to college and "yes" to living in a room inside a data center that houses 4, whirling ASICs. The machines generate about 80 decibels of noise apiece — but Sears says he likes being as close to the action as possible.
Fake Cryptocurrency Mining Apps Trick Victims Into Watching Ads, Paying for Subscription Service
But a profile of the town of East Wenatchee, Washington, by Paul Roberts in Politico Magazine is a must-read revelation about the physical reality of bitcoin mining. Whatever else bitcoin might be, it is—first and foremost—a way of converting electricity into money. Bitcoin mining is what we call programming computers to do arbitrarily complicated calculations in a puzzle competition that gets harder as time goes on. The hardware and software necessary to do this are, more or less, commoditized. Mining has always been an aspirational name, but if we accept the metaphor, the miners are mining electricity. So, to make money as a bitcoin miner, the only things that really matter are scale and access to cheap electricity. They tend to find it near big dams, which corral river water through massive turbines.
Tax Impact on Bitcoin and Cryptocurrency Investment
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Bitcoin mining in India: A profitable venture?
Reykjavik, Iceland — Marco Streng first visited Iceland to solve a simple problem. His bitcoin computers were using more energy and the remote North Atlantic island had massive amounts of electricity at inexpensive rates. He travelled no more than three kilometres from the airport terminal to an abandoned airstrip built by allied forces in World War II. This was in and the barren, windswept ground then seemed like an unlikely place for a financial district. Powerful computers, stacked inside long and grey warehouses, use more electricity than all Icelandic homes combined, according to a local energy firm.
Cryptocurrency
City of the big shoulders, hog butcher for the world, Chicago is looking to add another title for the digital age: cryptocurrency finance center. With little regulation and no backing other than the faith of its fervent believers, cryptocurrency has turned into digital gold for early adopters, despite wild market fluctuations and no shortage of naysayers. Launched in by anonymous computer developers , Bitcoin is a decentralized peer-to-peer payment network. While there is no central bank, the encrypted digital transactions are verified by blockchain technology, a type of database that forms a permanent ledger of all transactions across the shared computer network. Other major cryptocurrencies include Ethereum and Dogecoin, which was started in by a pair of software engineers as a joke. Major banks are starting to warm up to cryptocurrencies. With valuations growing, Illinois legislators are weighing a bill that would create a special purpose depository trust for digital assets, providing a regulatory framework for banks and other custodial institutions to hold cryptocurrency accounts for clients.
Since China outlawed cryptocurrency mining in June , neighbouring country Kazakhstan had become a significant location for Bitcoin miners. The expanse of space, warehouses and factories meant that mining rigs could be easily installed and powered at a lower cost than other Bitcoin-hungry locations. However, Alan Dorjiyev, president of the National Association of Blockchain and Data Centres Industry in Kazakhstan, believes that the issues experienced by Bitcoin miners in the country are now over. He says there is no threat of further internet shutdowns, but should accessibility issues occur, mining farmers are considering satellite options to ensure there is a reserve connection to the internet.
Asia correspondent chesh. From the outside, it looks like the sort of huge industrial site typical of West China. A dry, dusty corner of the country where 3, people are at work. But beyond the security gates at the main entrance, behind a padlocked and guarded door, is something entirely different: a secret Bitcoin mining farm.
By Natalie Walters. They use their earnings to buy more mining equipment for their company, Flifer Technologies, which they created on April They decided bitcoin had become too competitive so they chose to mine Ethereum. Their dad, Manish Raj, a former Wall Street investment banker, took out a loan to help them purchase supplies to start. The main equipment needed is graphics cards, which use software to guess the right code to get a bitcoin. They have 94 processors mining and mainly use Nvidia RTX graphics cards.
Most people are bamboozled by Bitcoin. It borrows physical metaphors from all over the place adding to the confusion. People shake their heads in confusion. But there are definitions of Bitcoin that even a five-year-old could understand.
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