China’s National Development Reform Commission, the powerful economic planning arm of the government, announced intentions to eliminate cryptocurrency mining.
The commission cited “seriously wasted resources” and environmental pollution among the reasons to ban cryptocurrency mining along with a potpourri of other businesses. The agency is taking public input until May 7, but also said that the ban could take effect as soon as the laws are formally issued.
China was once home to 70% of Bitcoin mining and 90% of trades, but those numbers have been declining for two years since the Chinese government has campaigned to lessen their citizen’s activities. Bitmain and BTC.TOP were originally drawn to locate in China due to cheap the energy supply, proximity of chip makers, and cheap labor, but are now moving overseas due to a more hostile environment. Bitmain let their Hong Kong IPO application lapse and has established mining locations in U.S. and Canada. Then BTC.Top, the third-biggest mining pool, announced last year plans to open a mining location in Canada.
Fueling hashrate uncertainty
Since Chinese miners account for a majority of the hashing power for many cryptocurrencies, their sudden ban could cause significant fluctuations in the hashrate. Even if many of the major miners relocate, a sudden ban would not give them enough time to move 100% of their operations. Plus, they will most likely be facing higher overhead costs, especially in the U.S. and Canada, which could effect the number of miners they operate. These combined effects create a greater opportunity for hostile actors to attack a blockchain since it would require less hashing power and thus less money.
Additionally, cryptocurrencies that have long difficulty adjustment periods such as Bitcoin’s every 2,016 blocks, which is currently around every 2 weeks, could become exponentially higher during the transition. This then risks making consumers wait long periods of time for a confirmed transaction and/or paying a large fee to move to the front of the line.
Dash provides extra security against hashrate shakeups
While Dash’s current hashrate is around 2.8 petahashes, which is actually up from 1.6 petahashes at the beginning of 2019, Dash is finding additional ways to help consumers and merchants. Dash is currently in the process of testing ChainLocks on testnet, which will soon be released as version 0.14 and will give the network extra security against 51% attacks since each node will lock-in the first block published to the network. Whereas many proof-of-work coins are vulnerable to attacks as their hashrates adjust, Dash with ChainLocks is able to significantly mitigate the risks that hostile actors will attempt to secretly mine blocks to reorg the chain, all without having to maintain a significantly high hashrate. Furthermore, Dash’s Dark Gravity Wave Algorithm adjusts the difficulty every block rather than Bitcoin’s every 2,016 blocks and is thus more responsive to hashrate changes to better serve consumers and merchants with an adaptable payment network.
These features mentioned above help Dash provide consumers and merchants with a very reliable network of financial and monetary freedom that is more independent of external actions that governments can enact to effect cryptocurrency.