Opinion: Bitcoin holders have no choice but to trust in Chinese crypto miners Last Updated: May 28, 2021 https://www.marketwatch.com/story/w...inese-crypto-miners-11622167864?mod=home-page By Mark Hulbert Two-thirds of the world’s bitcoin mining power is based in China, leaving the cryptocurrency potentially vulnerable Which of the following two statements bests describes bitcoin mining in China: It represents the actions of individuals acting independently and anonymously, who just happen to live in China. Even if the Chinese bitcoin miners aren’t explicitly part of a team, the Chinese government is aware of who they are and they could be induced (forced?) to collude with each other. My question goes to the heart of one of bitcoin’s fundamental weaknesses. As you can see from the chart below, two-thirds of the world’s bitcoin mining power is based in China, which is a huge potential vulnerability for the cryptocurrency. That’s because China potentially could mount what’s known as a majority attack, or a 51% attack, which would sabotage bitcoin’s integrity and possibly cause its price to plunge. As acknowledged on the bitcoin Wiki: “Bitcoin’s security model relies on no single coalition of miners controlling more than half the mining power.” While Bitcoin has not suffered a 51% attack, that doesn’t mean it couldn’t happen. Such attacks have not infrequently taken place with other cryptocurrencies, according to the MIT Media Lab’s Digital Currency Initiative. One of the biggest occurred in May 2018 with a cryptocurrency known as bitcoin gold, in which $72 million was stolen. The standard comeback is that bitcoin is so large that a 51% attack would be prohibitively expensive. But, according to Eric Budish, a professor of economics at the University of Chicago, state actors could have a geopolitical or financial terrorism incentive to sabotage bitcoin — in which case the cost of an attack might be acceptable. A matter of trust In truth, no one knows whether China could sabotage the bitcoin blockchain. Bitcoin holders just have to trust that they couldn’t or they wouldn’t. There is much irony in this, since bitcoin supporters rally around the cryptocurrency’s alleged foundation on anonymous and decentralized trust. How is believing that China couldn’t or wouldn’t sabotage bitcoin different from trusting the Federal Reserve not to debase the U.S. dollar? It hardly seems as though bitcoin has really solved the trust problem that fiat currencies infamously face. Trust in China is but one of the ways in which bitcoin’s champions haven’t really sidestepped the trust problem plaguing fiat currencies. Most bitcoin transactions occur through exchanges, such as Binance, Huobi Global and Coinbase Global. Such trading inherently relies on trusting those exchanges to do what they say they will. How is that different from trading with Bank of America or Goldman Sachs? Many, perhaps a majority, of those who trade bitcoin don’t truly understand the technical details of how it operates. They therefore are relying on little more than blind trust that bitcoin will work as advertised. Don’t be too sure that you are one of the few who understands bitcoin’s inner workings. I was quite taken in this regard by a comment made earlier this week by Joachim Klement, a trustee of the CFA Institute Research Foundation and the former head of the UBS Wealth Management Strategic Research team and head of equity strategy for UBS Wealth Management. Klement has degrees in theoretical and particle physics, mathematics, economics and finance. And yet, he wrote to clients, “Whenever I try to understand cryptocurrencies I am at a loss. Either, I manage to translate the jargon into something in plain English at which point I often end up with trivial conclusions, or I am unable to translate the jargon and technical terms into something that makes sense.” Claude Erb, a former commodities portfolio manager at TCW Group, draws a parallel between religious conviction and the trust and faith of bitcoin’s devotees. After all, he pointed out in an interview, no one has actually seen the bitcoin blockchain, and yet we have faith that it is all-knowing and benevolent. “Is that all that different from a belief in a ‘crypto God,'” he asks? “There are many leaps of faith required.” Erb likens bitcoin’s huge popularity to an “explosion in trust in a financial God, who may just be the man behind the curtain.” Pointing out bitcoin user’s reliance on trust doesn’t mean that fiat currencies don’t also suffer from profound flaws. They do. Similarly, there are huge trust issues with banks and other financial institutions, as we abundantly saw in the Great Financial Crisis. My point instead is that trust is required whether you use the traditional financial system or cryptocurrency. Be my guest if you want to use bitcoin. But please don’t claim that it doesn’t require as much blind trust as using the U.S. dollar, a bank or an investment firm.
But if Africans and Iranians are using bitcoin to trade with Chinese companies, because they can not get dollars then why would they close it down?
Riiiightttt.... Cryptos dealt blow as Iran cracks down, blaming them for blackouts MAY 27, 2021 Bitcoin's wild price moves stem from its design — and you'll need strong nerves to trade it. Ben Graham news.com.au Just one week after China cracked down hard on cryptocurrencies — sending prices of the digital coins diving across the board — Iran has brought in tough new measures against them. The government in the hard line Islamic nation of 82.91 million blamed the digital coins for the major blackouts across the nation — saying the energy-intensive mining process used to create them was the reason. A recent study found that Iran is responsible for around 4.5 per cent of all bitcoin mining in the world, creating close to $US1 billion of the asset a year. However, the nation has had enough. Iran’s President Hassan Rouhani overnight announced a four-month ban on all cryptocurrency mining, a day after his energy minister apologised for unplanned power cuts in major cities.
China’s Latest Crackdown on Bitcoin, Other Cryptocurrencies Shakes Market Major digital-currency exchanges suspend some activities that targeted users in China https://www.wsj.com/articles/chinas...er-cryptocurrencies-shakes-market-11621853002 .........“The Chinese government does not like the highly volatile, speculative nature of the cryptocurrency market,” said Fan Long, a co-founder of Conflux, a government-backed public blockchain network in China. He said the authorities could take further action to restrict or eliminate ways for Chinese citizens to exchange yuan into cryptocurrencies in the over-the-counter market. On Sunday, Huobi, a major cryptocurrency exchange, said it would stop selling mining machines and related services to new users in mainland China. It will also suspend futures contracts, exchange-traded products and leveraged investment products to new users in a few countries and regions. OKEx, another popular digital-currency exchange, on Monday said its own token, OKB, can no longer be traded with the Chinese yuan. Spokespeople for the Seychelles-based OKEx and Huobi said they strive to be in regulatory compliance in the jurisdictions in which they operate and are committed to serving and protecting their customers’ interests and assets. Both exchanges have operations in multiple countries. “Crypto-related activities have posed two serious issues in China,” namely financial stability and energy consumption, said Shen Wenhao, a Beijing-based partner at JunZeJun Law Offices. He said it was the first time the cabinet-level financial regulator had mentioned bitcoin mining publicly and linked it to financial stability. The recent messages from regulators “could signal the beginning of a series of new movements taken by the Chinese government to crack down on crypto-related activities from multiple angles,” he said......
the Iranian government are using it to avoid US sanctions, they are stopping individuals mining not the state.
If it fits in China's strategical plan to hurt the US, Africans and Iranians will be called collateral damage. In (economical) wars there will always be innocent victims. It is just part of the game and it cannot be avoided.
Iran bans cryptocurrency mining for four months to stave off blackouts The ban affects licensed and unlicensed miners alike By Mitchell Clark May 26, 2021 https://www.theverge.com/2021/5/26/...rrency-mining-ban-annual-summer-bitcoin-spies Photo by Michele Doying / The Verge Iran is temporarily banning cryptocurrency mining after some of the country’s major cities experienced repeated blackouts. President Hassan Rouhani said that the ban would last until September 22nd. The country has experienced summer blackouts in years past, and while the current round of outages is mostly being blamed on a drought that’s affecting the country’s ability to generate hydroelectric power, it seems that the Iranian government is eager to cut down on any aggravating factors. Power-hungry cryptocurrency mining operations, for instance. According to the BBC,Iran operates a program where Bitcoin miners must register with with the government, pay extra for electricity, and sell their coins to the central bank. President Rouhani stated that the legal mining operations in the country consume around 300MW a day; Iran’s state-owned grid operator, Tavanir, reportedly claimed a more conservative daily usage of 209MW. Either number is small compared to the 2,000MW that Al Jazeera reports is used by illegal miners, which reportedly make up 85 percent of the country’s operations. The deputy minister of electricity and energy even told one news organization that miners were using the free electricity afforded to mosques to run mining operations. President Rouhani seemed to joke about how much mining was unlicensed in the country, saying that “everybody has a few miners laying around and are producing Bitcoins,” though he also said that the unlicensed miners were the reason for the ban, which will apply to all mining in the country. According to the BBC, the licensed mining operations have already voluntarily shut down. While it could be argued that those who were already breaking the law may not be likely to stop because the government told them to, Iran has been cracking down on the unlicensed operations, enlisting spies to track them down. Tavanir also provides rewards for reporting people who are mining illegally. Crypto observers outside Iran will likely want to keep an eye on the price of Bitcoin to see how (or if) it reacts to an estimated 3.4 to 4.5 percent of the network’s mining capability being thrown into jeopardy. Bitcoin has had a turbulent time recently, as India and parts of China look to ban it, and as Tesla has stopped accepting the cryptocurrency, citing environmental concerns.
In Iran, if you are caught illegally mining bitcoin, what do they cut off? Because every transgression there is met with an amputation of some sort.
I heard if you take money out of a CD prematurely in Iran, there is just a "substantial penalty for early withdrawal."