A number of miners and industry insiders told China Business News that large Chinese mines have been shut down before, and recently small and medium-sized mines are also shutting down one after another, making Kazakhstan and other places seem to be the next “overseas” destination for miners.
Despite China’s ban on cryptocurrency trading and “mining”, the exploration of blockchain technology continues. In the recently concluded World Artificial Intelligence Conference, the founder and CEO of Distribution Technology, Mr. Da Hongfei, said in an interview with First Financial News that “manageability of blockchain” is a recent concern. The current global public chain market size and growth rate is much higher than the coalition chain business, but the public chain has many limitations, such as illegal crime, hacker theft, network risk, regulatory obstruction, etc., and brings a huge amount of irremediable losses. Therefore, how to increase the manageability of blockchain will be an important issue for blockchain to go mainstream.
Mining sites around the world shut down one after another
In June this year, Inner Mongolia and Qinghai have shut down most mining sites one after another, and then Sichuan Province, which has gathered many cryptocurrency mining sites due to its rich water resources, has also started to implement decommissioning actions. Sichuan Province’s retirement notice requires the completion of the screening and shutdown of key targets, and the completion of the screening and shutdown of 26 virtual currency “mining” projects reported by the State Grid Sichuan Power Company by June 20. At the same time, power generation enterprises are required to carry out self-examination and self-correction, and require a comprehensive cleanup and investigation, and will be reported by June 25, respectively, self-examination, cleanup and rectification and cleanup and shutdown.
First, after the big mines shut down, now small mines are also shutting down. “Some small mines in Sichuan will also be stopped next week.” A miner told reporters.
In fact, some miners have already chosen to go to sea. “A lot of people go to Kazakhstan.” The above miner said.
North America is also a destination for many miners. Miners are reportedly flocking to the U.S. state of Texas, where reliance on low electricity rates is attracting global mining companies. Chinese miners have been dominating the global bitcoin mining network, with multiple authoritative data showing that basically two years ago, Chinese mining pools had 65% of the bitcoin’s network-wide computing power, but the current map of power is gradually changing.
Bitmain, the world’s largest mining equipment company, is understood to have established a 50 MW facility in Texas in 2019, with plans to gradually expand.
With tightening regulations in China and overseas liquidity disturbances, Bitcoin has been around $30,000 recently after retreating from its all-time high of $64,000 in May.
Despite the coin price cut, the big rally began at a low of less than $4,000 in March 2020, so the current coin price is not low, which is also related to the flood of overseas liquidity. Compared to 2017, today the Federal Reserve’s balance sheet has doubled, the European Central Bank has increased by 70% and the Bank of Japan has expanded by 40%.
The general consensus across the board is that this pattern of oscillating consolidation will continue into the second half of the year, with volatility and liquidity changes dominating the market. Matt Weller, head of global research at Goldman Sachs, told reporters that U.S. headline inflation reached 5.4% in June, the highest point in nearly 13 years; core CPI rose at an annual rate of 4.5%, the highest point in 30 years. The Fed’s patience will be challenged.
In addition, Bitcoin is gradually becoming a tool for money laundering and hackers to demand ransom. From the information publicly disclosed by the U.S. Department of Justice, the FBI previously recovered a total of 63.7 bitcoins, worth about $2.3 million. During the investigation, case officers tracked the bitcoins through the cryptocurrency’s public ledger, while identifying the cryptocurrency wallet used by the hacker group to collect the money, and eventually the FBI got the wallet’s private key.
Industry insiders told reporters that although there is no way to know exactly how the FBI obtained the private key, some valuable information can still be obtained from public information. For example, investigators have been able to track the bitcoin involved by retrieving transaction records from the cryptocurrency’s public ledger and identifying the address used by the hackers to collect the money, all of which means that case officers and relevant departments already have a deeper understanding of bitcoin regulation and can counteract cryptocurrency-related crimes through technical means.
Despite the overall strict regulation of mining and bitcoin trading, China’s exploration of the underlying blockchain technology will continue.
During the World Congress on Artificial Intelligence, discussions from all walks of life focused on blockchain empowerment – blockchain technology can be deeply integrated with the industrial side, empower the real economy, bring positive and effective help to various industries, and take advantage of financial mutual trust, data security and industrial cooperation.
Specifically, in the blockchain sub-forum, Shanghai Financial Information Industry Association, together with several industry research institutions, released the “2021 Global Blockchain Innovation Application Demonstration Case Collection”, for example, the “Steel Treasure Digital Supervised Warehouse Chattel Pledge Financing Platform” was selected. The platform is composed of “underlying blockchain platform + business platform + IOT monitoring module + WMS system + digital supervisory warehouse”, which uses blockchain technology to empower and enhance trust, and helps financial institutions to monitor goods in real time, keep an eye on prices day by day, and trace the origin of goods through the digital monitoring platform of professional commodity storage enterprises. Warehouse receipt information can not be tampered with, to ensure that the “consistency of the bill of goods”, to assist financial institutions risk control, to solve the long-existing bulk traders working capital shortage, difficult to obtain bank financing and other pain points. It is understood that this kind of application is also more suitable for replication and promotion.
In addition to the above-mentioned alliance chain, manageable public chain is also the focus of discussion from all walks of life. Currently, the global public chain market is much larger and growing faster than the alliance chain business, but there are many limitations of the public chain, such as illegal crimes, hacker theft, cyber risks, regulatory blockage, etc., and can bring huge irremediable losses. As of the first quarter of 2021, the value of crypto assets permanently lost due to operational mishaps may have reached $200 billion, and the decentralized financial sector has incurred $132 million in economic losses due to vulnerabilities in contract mechanisms. Therefore, how to increase the manageability of blockchain will be an important issue for blockchain to go mainstream.
According to Da Hongfei, the manageability of blockchain specifically includes several aspects such as reviewable, editable, licensable, governable, and auditable, “We need to explore ‘manageable blockchain based on two-layer ledger’, consisting of a no-licensing ledger layer (DAG structure) and a regulatory-compatible consensus layer requiring licensing ( BFT/POA) that guarantees regulatory recognition of blockchain nodes.” This attempt will enable consensus-based on-chain governance under the condition of clear consensus mechanisms and governance rules that can block socially harmful information, block or intercept illegal transactions, stop services for businesses that do not meet regulatory standards, filter sensitive information, and disable services for specific identity participants.