What Chinese Miners Will Do With Mined Bitcoins

[limopc]

Watching all this mess in China and closing Chinese exchanges by end of September, and knowing that a huge percentage of all mining power is in China, some questions need answers, facts and figures to be able to figure out what will happen.
. What normally miners do with their mined bitcoins? They used to pay salaries in CNY, electricity... etc. How would the carry on after 30 September.
. Do they have accounts in foreign exchanges to sell their bitcoins?
. If not, how would they keep running their business?
. If they stopped mining, what would this mean to bitcoin? Would the remaining miners be enough to keep the transactions going?
. With this decline, won't the miners be selling more bitcoins to cover their costs?

Having answers and FACTS about the above would help us understand more and figure out what might happen.

Awaiting your contributions.

[BrewMaster]

what you see is mostly mining pools that are getting paid. these pools pay their miners who connect to them (some from outside China even) in bitcoin. and each of those miners can choose to do whatever they want with the small amounts they get.

generally speaking buying and selling bitcoin is not banned nor illegal in China. it is perfectly legal to do it as you wish. there are a lot of options to sell bitcoin. not all exchanges are closed, there are foreign exchanges, there is p2p trading like what localbitcoins offer, there are options off-the-market and away from public eyes probably too.

as for "if they stopped mining", i have to say it depends on how much hashrate will go out. if it is big enough, there will be delays (can be a couple of minutes delay to an hour depending on how much leaves) in when new blocks will be found for a while until the next difficulty adjustment and by then the new difficulty will be in a way to go back to normal (2016 blocks in 2 weeks IIRC).

[llhibionada]

China allegedly have the highest total worldwide hashrate and has one of the cheapest electricity rates, reports have said that they are gonna close down exchanges throughout the country however the country will continue to allow over-the-counter transactions (not so sure about this) what scary is the potential of what happened to venezuela would turn out the same in china where miners are being arrested for terrorism, money laundering and all sorts of computer crimes because of the government. I just hope its a different thing tho

[Minabo]

I haven't heard about any restrictions on mining in China, only about exchanges. I think Chinese market will find new ways to deal with bitcoin and other altcoins as well.

[ranochigo]

. What normally miners do with their mined bitcoins? They used to pay salaries in CNY, electricity... etc. How would the carry on after 30 September.

In all honesty, the increase in Bitcoin value would already have led to most miners having ROIed, it isn't that much of an issue considering the salary and electrical fees there.

. If not, how would they keep running their business?

Bitcoin is not illegal there. Exchanges are prohibited from operating but people can still trade Bitcoins within themselves. Its impossible to restrict it at all.

. If they stopped mining, what would this mean to bitcoin? Would the remaining miners be enough to keep the transactions going?

Yes. Bitcoin will continue as long as there is a single miner. If majority of the hashrates were to be shutdown at the same time, blocks would take an average twice as long and the difficulty will adjust to compensate for it by the next difficulty adjustment. Nothing is affected.

With this decline, won't the miners be selling more bitcoins to cover their costs?

I've seen a documentary by Vice and I vaguely remember that the owner of the farms said that they hold parts of it and sell off the others. Miners would sell more Bitcoins but it probably isn't that necessary.

[CryptoBry]

what you see is mostly mining pools that are getting paid. these pools pay their miners who connect to them (some from outside China even) in bitcoin. and each of those miners can choose to do whatever they want with the small amounts they get.

generally speaking buying and selling bitcoin is not banned nor illegal in China. it is perfectly legal to do it as you wish. there are a lot of options to sell bitcoin. not all exchanges are closed, there are foreign exchanges, there is p2p trading like what localbitcoins offer, there are options off-the-market and away from public eyes probably too.

as for "if they stopped mining", i have to say it depends on how much hashrate will go out. if it is big enough, there will be delays (can be a couple of minutes delay to an hour depending on how much leaves) in when new blocks will be found for a while until the next difficulty adjustment and by then the new difficulty will be in a way to go back to normal (2016 blocks in 2 weeks IIRC).

Right. Bitcoin is not yet illegal or banned in China only the operation of exchanges. Well, we don't know if time will come when the whole of Bitcoin and all of cryptocurrency can be gone for good in China. But one thing for sure, it would be better to have no China in cryptocurrency as it is the source of so many headaches.

[Variogam]

What I got from the news is Chinese exchanges need licence to continue operation after September, also know as regulation. So I guess nothing changes to Chinese miners, they can sell Bitcoins at those regulated exchanges to pay electricity.

[BitcoinPC]

We don't live in China, if I was to the people on his part. Therefore it is not worth much but they do with their going. They can burn them for all world. The effect of Derek lights on us it's not going to be anything other than men. Therefore it is not something that we need to discuss here or we need to discuss here's the future there is nothing bad about it

[MAbtc]

What I got from the news is Chinese exchanges need licence to continue operation after September, also know as regulation. So I guess nothing changes to Chinese miners, they can sell Bitcoins at those regulated exchanges to pay electricity.

One of the main questions is what they can do now. It could be several months (at least) before there are any regulated exchanges in China; Huobi and Okcoin aren't even set to close BTCCNY trading until October 31st.

There seems to have been some emphasis on "order book" exchanges, at least from Jihan Wu. That leads me to believe that OTC trades may still be fine, so miners could cover their overhead expenses that way in the interim.

[fb39ca4]

China allegedly have the highest total worldwide hashrate and has one of the cheapest electricity rates, reports have said that they are gonna close down exchanges throughout the country however the country will continue to allow over-the-counter transactions (not so sure about this) what scary is the potential of what happened to venezuela would turn out the same in china where miners are being arrested for terrorism, money laundering and all sorts of computer crimes because of the government. I just hope its a different thing tho

they just close some exchange. after that they will need all exchange verify all account to make sure no one can you bitcoin or other coin for money laundering.

[wilhb81]

According to my Chinese's friends who mining BTC - They CAN still mine BTC, but they need to figure out the way to trade their mined BTC, since all of the main BTC exchanges will be closed up after 1st November 2017...

[musicdj1]

The beauty of decentralize business! They can sell it anyway they want! Cash out anywhere! Why you are stuck your head in the sand!

Welcome to the decentralization! Screw China, JPMorgan Chase, the Fucking FED...And all these media Bloomberg..

 

[MAbtc]

According to my Chinese's friends who mining BTC - They CAN still mine BTC, but they need to figure out the way to trade their mined BTC, since all of the main BTC exchanges will be closed up after 1st November 2017...

Casual miners will probably need to find OTC / LocalBitcoins types of trades in order to cover their mining expenses. But they may not be in the worst position. With no exchanges offering BTCCNY trading, there will probably be an explosion in local OTC trading. I hope the government doesn't react poorly to that as well. In any case, from the looks of it, regulated exchanges are the end goal here. So I think we're probably just looking at a few months where OTC trading is the only option.

[whitemacna]

what you see is mostly mining pools that are getting paid. these pools pay their miners who connect to them (some from outside China even) in bitcoin. and each of those miners can choose to do whatever they want with the small amounts they get.I haven't heard about any restrictions on mining in China, only about exchanges. I think Chinese market will find new ways to deal with bitcoin and other altcoins as well.