There are ups and downs in the crypto market, and it depends on various factors such as trending news, the latest government policy, announcements, tweets, etc. But the price fluctuations mainly depend on the demand and supply of bitcoin, and demand and supply depend on other factors.

The government plays a vital role in the price fluctuations because people will buy or sell according to the government’s new policy or guidelines. In India, there was news that the government would ban bitcoin, and after the news, people started selling bitcoin, and the price of bitcoin also started decreasing.

In some countries, bitcoin is banned, but the El-Salvador is the only country that declares bitcoin as legal tender as legal currency, i.e., the citizens of El-Salvador can use it as fiat currency or legal currency. Bitcoin is not a regulated currency, so some economies are afraid, and China is one of them. China banned bitcoin in 2019, and in this article, we will discuss the facts of banning bitcoin.

Bitcoin in brief:

Bitcoin is a digital coin that is separated from fiat currency and another cryptocurrency. Bitcoin came into existence in 2008, but the white paper shows the name of Satoshi Nakamoto as the inventor. Bitcoin is a decentralized system which means there are a lot of nodes of miners working to solve and broadcast the bitcoin transactions on the blockchain platform. However, Bitcoin does not allow third parties to get involved because it is a non-controllable cryptocurrency.

Reasons for banning bitcoin in China:

Some other countries banned bitcoin because there are some risks or limitations of this digital currency. For example, Bitcoin is not a regulated currency, unlike fiat currency regulated by the government or controlled by the government and central bank. Since there is no control over bitcoin, it gives birth to many illicit activities, which is why China banned bitcoin cryptocurrency.

Suppose two persons want to do illegal activities, such as person A buying drugs from Person B. They will do bitcoin transactions because the bitcoin transactions are not traceable. All the Bitcoin transactions occur on the blockchain platform, which means anyone can see the transaction id of Person A and Person B and check the transaction amount but cannot get the personal information of these two people.

So bitcoin will hide the identity of people who are doing illegal activities. Other activities include bitcoin scams and frauds, money laundering, illegal fundraising through bitcoin, bitcoin donations frauds, pyramid schemes, criminal activities, etc. China decided against banning bitcoin because it is hazardous for the private property of china and also for the citizens of China.

Trading and mining banned:

Bitcoin trading and mining are entirely banned in China and the reason we read above. There are the following brief introduction to bitcoin trading and mining given below:-

Bitcoin trading:- Bitcoin trading means the short-term holding of bitcoin for earning profit. In simple words, bitcoin trading means buying bitcoin at the market price in the expectation that the price of bitcoin increases within a few hours or before closing the market and selling the bitcoin when bitcoin price increases.

Bitcoin trading is a hazardous short-term investment, and almost all beginners lose all money in bitcoin trading, and some people commit suicide who lost all their money in bitcoin trading. So to protect the people who want to earn money through bitcoin trading, China banned bitcoin trading. If anyone in China will do bitcoin trading, then the china government will take penalty or punishment. So there are a lot of bitcoin exchanges in China that got banned. For more information on bitcoin trading, check the bitcoin digital app.

Bitcoin mining: Bitcoin mining means solving the bitcoin’s unconfirmed transactions through computational power and solving the complex algorithms in a programming language. If bitcoin is banned in China, there is no means of mining. Various mining companies or individual miners moved from China to outside to continue their bitcoin mining.

A miner gets 6.25 BTC or bitcoins when they solve a block of bitcoin transactions, and many Chinese miners suffer losses after banning bitcoin in china. The equipment for mining bitcoins is very costly such as ASIC machines, electricity expenses, processors, cooling equipment, and other equipment, and miners who did not move suffered huge losses.