Bitcoin has long been heralded as a decentralized financial system that has proven itself as separate from the legacy monetary institutions that exist currently, These systems are seen as broken and in need of change, and Bitcoin is often the answer that is being pointed to.
However, even though Bitcoin can operate almost entirely as a decentralized and stand-alone financial system in some forms, in the mainstream world, there are instances where the coin and the system fall prey to legacy and central forces.
Trying to link Bitcoin to fiat, through exchanges, opens it up heavily to traditional and harsh regulations that often fly in the face of Bitcoin’s key concepts – anonymity as a prime example. But more so, there are other aspects where Bitcoin’s decentralised force is challenged, and it is forced to obey central and traditional rules and regulations.
Recently, reports out of China has shown that the Bitcoin mining sector, with its links to national electricity centres, is under pressure and being forced to obey centralised controls. The Asia Times reported that during the dry season, which extends from October through April, the electricity supply drops drastically in Southwest China, which spells bad news for miners in Sichuan Province.
Local authorities in Sichuan are now pressuring Bitcoin miners to scale down their operations and be more frugal with their electricity usage as the grid in the south-west of China feels the strain.
Of course, this is not good news for Bitcoin mining farms who like to operate 365 days a year, but more so, it shines a light on how much pressure Bitcoin and its decentralized system is under pressure from the rest of the mainstream world as it tries to find its place.
China has been one of the key examples of where a nation has enough power to influence the running of Bitcoin. While China has not been able to totally outlaw and quash bitcoin in the nation, it did a good job of strangling it through laws and regulations.
Bitcoin may be a decentralised force that can get around many traditional and centralised forces, it is still a nascent technology and industry that needs the backing from other sectors. These other sectors – including governments and regulators – also know they have a lot of power on the proliferation and promulgation of digital currencies.
Mining in China is still a contentious issue, with tolerance seemingly only being granted in the wet season. Now, with the dry season, it will be interesting to see how much sway this crackdown on miners in Sichuan has on the growth of the coin.