One of the main worries about Bitcoin's future is its energy footprint. China's restriction on Bitcoin probably worsened the recent price correction.
The Asian giant issued restrictions on banks and means of payment on BTC.
The nation would seek to pave the way for its cryptocurrency, the digital yuan.
Bitcoin's energy consumption adds to the cryptocurrency worries.
Musk and Saylor announce Bitcoin Mining Council.
China's recent restrictions on bitcoin (BTC) and cryptocurrencies garner media attention globally, but these are not new. Since 2013, the country has prohibited, at least seven times, any operation, commercialization, or promotion of the first digital asset. Every call to Bitcoin's end has resulted in sustained price increases over time.
The Asian giant maintains a tight relationship with BTC as a cryptocurrency but has been more flexible in digital mining. However, this latter aspect of the industry is also beginning to change with new provisions in Inner Mongolia.
Eight years ago, China issued a first warning: Authorities forbid banks from conducting bitcoin-related transactions. The restriction was a joint decision between the People's Bank of China, financial regulators, and the information technology ministry, the BBC reported at the time.
In 2014, and after government pressure, China's most prominent online merchant, Taobao, belonging to the Alibaba group, banned bitcoin sales. The move came just as Alibaba was trying to move toward its primary public offering of shares (IPO).
In September 2017, multiple media outlets reported that China was ready to ban bitcoin and cryptocurrency exchanges. Bloomberg outlined that the country would restrict trading exchanges but would maintain over-the-counter OTC markets. The news collapsed the Bitcoin price by $500 to place it at the time at $4,100.
More attacks on Bitcoin and cryptocurrencies
If eliminating local exchanges wasn't enough, China targeted its restrictions in February 2018 against international exchanges. The country would block all the web pages of foreign platforms to stop the commercialization of the cryptocurrency.
That same year, the Asian giant again, through its central bank, closed the doors to Initial Coin Offerings (ICO). The decision came after analysts determined that they were suspicious collections and would probably serve to commit fraud.
Two years ago, the local economic planning agency indicated that Bitcoin mining activities would enter a list of industries that could be closed. The argument was that the equipment used consumed a lot of electrical energy, contributing to pollution and wasted resources.
This week's most recent restriction occurred when China's government prohibited financial institutions and payment companies from operating cryptocurrencies. The country once again repeated its restrictive formula, and the price of BTC fell back.
Despite all China's efforts to veto Bitcoin from different flanks, the country has not interrupted its operation. Since 2013, the year of its first ban, the price of BTC has gone from $100 to more than $ 64,000 last April, a 640 fold Bitcoin price increase.
Musk, Saylor and Bitcoin Energy Consumption
Elon Musk and Michael Saylor announce the creation of the Bitcoin Mining Council to promote renewable energy. The measure promoted by Musk and Saylor seeks to encourage the use of renewable energy for Bitcoin mining precisely to guarantee the sustainability of this practice for the next few years.
In a new message published through his official Twitter account, the CEO of Tesla and SpaceX, Elon Musk, indicated that they are forming a 'Bitcoin Mining Council,' which aims to seek improvements associated with the sustainability of this practice, mainly through the use of renewable energy.
Musk indicated this in a message posted on Twitter, in which he wrote the following:
Subsequently, a message published by the CEO of MicroStrategy, Michael Saylor, revealed that he participated as an organizer of the meeting. The reputed Bitcoin enthusiast indicated that they agreed to form the first Bitcoin Mining Council in said meeting, seeking to promote renewable energies for this practice.
In this regard, Saylor commented:
The good news quickly went viral through the social network, becoming even one of the Trending Topic topics in the US, hand in hand with the announcement made by investor Ray Dalio. He revealed in one of the conferences organized by the CoinDesk team that owned Bitcoin among its assets.
In favor of the use of renewable energy in Bitcoin mining
These actions promoted by Saylor and Musk are aligned with the objectives set by the latter, which announced several days ago that Tesla would stop accepting payments with Bitcoin precisely because of the large carbon footprint derived from its operations.
This announcement generated a significant drop in the price of the leading digital currency, which quickly spread to other reputable altcoins in this market. And although Musk clarified that this did not mean that Tesla would proceed to sell his accumulated bitcoins, many enthusiasts considered that the tycoon harmed the cryptocurrency ecosystem in general with his statements.
However, the operational problems faced by the Bitcoin network and the significant energy expenditure associated with its operations have always been on the table for debate. They are genuine problems that many developers and enthusiasts are trying to solve. These solutions try to guarantee the project's sustainability for the next few years.
For now, the creation of the Bitcoin Mining Council comes at a perfect time since there are currently many fears about possible harmful measures by the Chinese government against this activity, precisely because of the recent statements issued by a senior official last week.