China’s recent actions on Bitcoin are going to reverberate across the industry for some time, the CEO of Graph Blockchain believes. Through subsidiary Babbage Mining, a proof of stake miner focused on altcoins, Graph Blockchain exposes its investors to cryptocurrency.
The decision crack down on cryptocurrency mining is a clear sign China is progressing in its development of a central bank digital currency (CBDC) Paul Haber said. While predictable, that level of control brings tremendous downside.
“However, by trying to control which digital currency their people use they are removing themselves from the rest of the market which will exclude them from some of the most important technological developments of the next few decades,” Haber said.
Chinese miners had long grabbed much of Bitcoin’s hashrate, raising concerns of monopolization. While the crackdown will stop that, it could hurt investors around the globe.
“If their miners feel threatened and this reduces the hashrate produced in China, the government will have given up their power over Bitcoin,” Haber noted. “Sadly, Chinese miners are some of the biggest whales in the network and they will likely feel pressure to sell at least some of their significant current holdings which will result in price reduction.”