Last Thursday the Russian central bank proposed a ban on bitcoin and crypto mining for reasons of:
- Financial stability
- Citizens’ well being
- Monetary policy sovereignty
Russia is a major player in the crypto mining game, ranking the 3rd highest hash power after the United States and Kazakhstan, which has added to the negative or uncertain market sentiment.
On the face of it. Having Russia turn off the graphic processors and Kazakhstan facing significant internal problems with mass protests that look to me closer to civil war than anything else, is a problem. But only in the short run. Look how quickly mining resources left china and set up shop in Kazakhstan and the united states.
In May of last year china had 71% of the hash rate before outlawing crypto mining and the hash rate plummet from 180 exahash to 60 exahash. It took the network 6 months to recover all of that mining power and with it went one of the classic bitcoin FUDs around bitcoin mining centralisation.
It’s no surprise that it is China and now Russia who distancing themselves from bitcoin. Bitcoin is anathema is tyrannical regimes. It’s a freedom catalyst of immense power that gives whoever holds it a new appreciation of personal sovereignty and decentralisation. Something a one party state simply can’t tolerate.
The shame really is that these countries had enormous competitive advantage in mining and could have used that in their wider aims to destabilise the dollar financial system and hegemony. Nevertheless, it seems the prospect of a hard money like Bitcoin competing with their surveillance central bank digital currency is a too much of a risk to allow.
This clip is from Episode 13 of The Bitcoin Briefing Podcast.
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