Bitcoin mining is reshaping cryptocurrency


While some countries, especially China, have taken drastic measures against Bitcoin mining, causing mining activities to stop, some countries such as El Salvador are making plans to increase the use and production of Bitcoin.

According to the information compiled by the AA correspondent, Bitcoin, which is the most popular among cryptocurrencies with a market volume of more than $ 640 billion, has met with increasing interest from both investors and miners over the years. After this interest, there has been a serious loss of value in Bitcoin in recent months. The cryptocurrency, which saw its historical peak with $ 63 thousand in April, has been trading at 30 thousand levels in recent weeks.

Experts state that the decisions taken to restrict Bitcoin mining, especially in China, play an important role in this loss of value in Bitcoin. The Chinese government announced last month that drastic measures will be implemented to restrict Bitcoin mining in the country, with these measures protecting the country’s financial system as well as reducing carbon emissions. With China’s local financial institutions and payment systems banned from offering cryptocurrencies, Bitcoin has lost more than 12 percent.

China and Britain’s decisions were effective

The fact that China is the country where more than half of Bitcoin mining is carried out has caused these drastic measures to negatively affect mining activities. According to international sources, after the decision, a large number of Bitcoin miners ceased their activities.

In addition to mining activities, various restrictions on the trading of cryptocurrencies are also on the agenda. The British Financial Management Authority (FCA) announced last week that Binance, the world’s largest cryptocurrency exchange, has restricted its activity in the United Kingdom, and announced that this exchange will not be able to carry out any regulated activities in the country. The FCA similarly stated in January that cryptocurrencies pose an extremely high level of risk.

This application in the UK was among the factors affecting Bitcoin, both as Binance is the largest cryptocurrency exchange and Bitcoin is the most traded cryptocurrency.

El Salvador calls for mining efforts by legalizing Bitcoin

In response to these developments, which “negatively” affect the trading and mining of cryptocurrencies in various countries, especially China, the Central American country, El Salvador, became the first country in the world where digital money was officially accepted after the legalization of the crypto currency Bitcoin in the parliament with the decision taken this month.

El Salvador’s President Nayib Bukele, in his statement on his social media account, stated that 70 percent of the population does not have access to financial services, and that the population without a bank account will have financial opportunities thanks to cryptocurrencies. Bukele stated that after the decision on Bitcoin, El Salvador will turn into one of the most important crypto money centers in the world.

Noting that El Salvadorans living abroad send 6 billion dollars a year to their country, Bukele noted that they will facilitate money transfer thanks to Bitcoin and that more than one million low-income families will benefit from the change.

In addition, in El Salvador, the administration has called for the use of geothermal energy for Bitcoin mining.

The share of the USA, Canada, Sweden and Argentina in Bitcoin mining is expected to increase

These developments on a global scale for Bitcoin affect the “hash rate”, which is the unit of measurement of the processing power of the Bitcoin network, as well as the value of Bitcoin. Bitcoin’s hash rate has slumped to a 13-month low after a drastic drop in mining activity in China.

According to data from Blockchain.com, the hash rate of Bitcoin, which was 180.6 TH/s on May 14, was 90.8 TH/s yesterday. This decrease revealed the effect of the developments in Bitcoin in recent weeks on the hash rate. Similar to the hash rate, the total number of confirmed transactions per day has also been affected by Bitcoin-related developments. At the beginning of 2021, over 400 thousand confirmed transactions were made per day on the Bitcoin network, while these days, transactions are carried out at levels of 200 thousand.

Although the value of Bitcoin is generally followed intensively by the public, the change in indicators such as the “hash rate” reveals the role of the policies and decisions taken in shaping the crypto money balances on a macro scale.

According to the news in Bloomberg.com, China’s 65 percent share in Bitcoin mining, which took drastic measures regarding crypto money mining, decreased below 50 percent at the end of the year; The share of the USA, Canada, Sweden and Argentina is expected to increase.