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Six investigative reports were published in 10 days, covering multiple important links in the virtual currency industry chain, from mining to trading to financing... Xinhua News Agency's investigative reports hit the crux of the chaos in the "cryptocurrency circle", not only setting off a storm in the "cryptocurrency circle", but also making public the various problems existing in the entire virtual currency industry chain. Why does Xinhua News Agency keep a close eye on the "cryptocurrency circle"? We cannot let "air coins" reap our hard-earned money. Collapse, plunge, bloodbath... Since May 19, these "tragic" words have been used over and over again to describe the market trends of virtual currencies such as Bitcoin. Every major price change affects the mood of "coin speculators" and stimulates the nerves of every onlooker.
Bitcoin plummeted nearly 30% overnight. The reporter contacted people in the "currency circle" to understand the situation, and there was widespread grief. Some people lost 3 million yuan in their accounts due to leverage, some lost all their recent profits, and some suffered heavy losses due to abnormal trading platforms that could not be operated... The picture shows a screenshot of a WeChat chat between the reporter and an investor. On May 19, the investor suffered heavy losses due to a margin call in virtual currency leveraged trading.
The risk warning brought by the overnight plunge is better than thousands of warnings, but these painful costs can be avoided. Reports must be issued as soon as possible to reveal the investment risks in the cryptocurrency circle!
On May 20, the first article introducing the risks of the cryptocurrency circle was successfully broadcast to the public, which immediately attracted widespread attention from the market. In the following 10 days, virtual currencies experienced waves of "roller coaster" rises and falls. Xinhua News Agency followed the hot spots and issued one investigative report after another. Many people saw the "doorway" of virtual currency trading speculation from them:
Those founders who focus on making money through "air coins" often register a shell company first and spend money to find an outsourcing team to design a "virtual currency"; they hype up the project through advertising, lectures, celebrity endorsements, live broadcasts, etc.; then they attract investors to use overseas platforms for crowdfunding for "listing" and recharge transactions; a large number of holders manipulate prices to soar, attract more funds to enter and then sell them, "reaping" the hard-earned money of investors.
Dogcoin, catcoin, pigcoin, eelcoin...
"Air coins" are like air, invisible and intangible, have no physical support and no application value.
Once the prices of such speculative targets collapse and the tide recedes, all that is left for investors is huge losses and regret.
Moreover, based on current judicial practice in my country, virtual currency transaction contracts are not protected by law, and the consequences and losses caused are borne by the relevant parties themselves.
During the interview, the victim, Ms. Cao, made a statement that left a deep impression on the reporter. She said: "I know that investing in virtual currency is very risky, but at the time I thought that as long as someone bought it and I resold it in the middle, I would always make money."
Among the investors who were deceived and harvested, some were driven by high returns and deceived by sweet words, but many people knew that it might be a scam, but were still willing to take risks, hoping that they would not be the last one to "pass the parcel". It was with this "gambler" mentality that many investors fell into the trap set by criminals step by step. Therefore, in the series of reports, reporters often spend a lot of space to warn the public of the risks of speculation in virtual currency transactions, and earnestly advise the public to stay away from "cryptocurrency speculation" and establish correct investment concepts.
It is gratifying that the reporter received positive feedback from netizens after the article was published. Many people said that they have recognized the investment risks and will not rashly get involved in areas that they cannot see clearly or understand. We cannot allow high-energy-consuming "mines" to occupy precious resources. If we want to get to the bottom of the chaos in the "cryptocurrency circle", we must start the investigation from the upstream of the industrial chain.
Virtual currencies such as Bitcoin have no physical form. They are composed of strings of complex codes generated by computers and need to be obtained through computer calculations based on algorithms, commonly known as "mining."
Virtual currency mining requires the help of computer calculations, and the "mining machines" used for mining must have extremely strong data processing capabilities and generally have high power.
In order to mine virtual currency and exchange it for money as soon as possible, "miners" gather many "mining machines" to form a "mine farm" and dig day and night, resulting in huge electricity consumption.
The exterior of a "mine" visited by reporters on May 26. It is called a "data center" but is actually a "mine".
How much electricity does the "mine" consume? We must go to the site to find out. But it takes courage and determination to secretly visit such a "mine" hidden in the deep mountains and valleys.
Taking a car from Guza Town, Kangding City, Sichuan Province, and driving along a dirt road that was not even on the map, the reporter finally arrived at a "mine" on the river bank.
In the simple factory building, on rows of large iron racks, the high-speed running "mining machines" emit waves of heat, and the huge roar of the fans even drowns out the sound of the rushing water of the Balang River, a tributary of the Dadu River not far away.
Through chatting with several local operation and maintenance personnel of the "mine", the reporter learned that this company was actually engaged in virtual currency mining activities under the name of "hydropower consumption" and under the banner of "data center". The company has more than a dozen "mines" like this that are directly powered by small hydropower stations in western Sichuan.
As the investigation deepened, the power consumption of the "mines" amazed the reporter: some "mines" consume millions of kilowatt-hours of electricity a day; a "mine" in a western province can "eat up" 45 million kilowatt-hours of electricity a month; a "mine" in a certain place in the southwest consumes the same amount of electricity as three cities in a year; the global Bitcoin mining power consumption is equivalent to the power consumption of some medium-sized countries...
On May 26, the reporter saw in a "mine" in a western province that the metal racks in each computer room were filled with "mining machines", the fans were roaring, and the outside of the computer chassis was covered with dust.
Such a huge amount of electricity consumption neither supports any real industry nor produces any actual value, let alone drives employment and tax revenue. The reporter visited a company that claims to be engaged in "data business" but is actually mining. Last year, the average monthly electricity consumption was as high as 25 million kWh, but the annual tax paid was only 250,000 yuan. Only a few workers were seen in the huge factory.
In my country, virtual currency trading platforms such as Bitcoin were gradually cleared up in 2018, but the regulators at the time did not clearly carry out crackdowns and governance on mining activities, nor did they encourage them.
In the reporter's impression, the attitudes of local governments towards "mines" in the past few years were different. Some were clearly "unwelcome", while others kept a wait-and-see attitude, allowing the "mines" to operate as long as they did not engage in illegal financial business, money laundering, or "stealing electricity".
Some "mines" engage in virtual currency mining activities in the name of "hydropower consumption" under the guise of "blockchain" and "big data". They have even entered the "hydropower consumption industry demonstration zones" in certain regions and become "demonstration enterprises" for hydropower consumption.
On May 26, the reporter visited the "mine" site and saw some equipment "remains" piled up randomly in a corner of the hall.
As virtual currencies emerge in an endless stream, the power consumption of mining is also growing explosively, which has brought huge pressure on my country's energy supply. The high energy consumption of virtual currency mining has aroused the high vigilance of local governments. Since the beginning of this year, the Inner Mongolia Autonomous Region has adopted a number of policy measures to clear virtual currency mining projects. As of the end of April, 35 mining companies have been closed and cleared.
This time, both the national and local governments have sent clearer and stronger signals.
On May 21, the 51st meeting of the Financial Stability and Development Committee of the State Council clearly proposed to crack down on Bitcoin mining and trading activities.
To crack down on virtual currency mining, not only do local governments need to take the initiative to issue documents to stop mining activities and cut off growth; they also need to introduce comprehensive measures including electricity prices, land, taxation, environmental protection and other aspects to promote the orderly exit of existing companies. The fence of the system cannot be relaxed "Since our country has cleared the virtual currency trading platforms, why are there so many people in the 'currency circle'? It seems that it has not delayed the speculation of coins." Netizens often raise similar questions in their comments on the manuscript. As early as 2013, the People's Bank of China and five other departments issued a document clearly requiring all financial institutions and payment institutions not to conduct business related to Bitcoin. In other words, from then on, Bitcoin cannot be converted into RMB, nor can it be used for payment and settlement. So, how do the large amounts of virtual currencies mined by domestic "mines" turn into cash and maintain the operation of enterprises? How do domestic investors' virtual currencies on overseas trading platforms achieve recharge and withdrawal? This shows that some financial institutions and payment institutions have not strictly implemented relevant requirements, leaving opportunities for virtual currency trading platforms. In the interview, many experts expressed concern: Will the speculative risks of virtual currencies such as Bitcoin be transmitted to the financial system...
Recently, the China Internet Finance Association, the China Banking Association, and the China Payment and Clearing Association jointly issued an announcement, reiterating that:
Financial institutions, payment institutions and other member units shall not use virtual currency to price products and services, shall not underwrite insurance business related to virtual currency or include virtual currency in the scope of insurance liability, and shall not directly or indirectly provide customers with other virtual currency-related services. Internet platform enterprise member units shall not provide network business venues, commercial displays, marketing promotions, paid traffic diversion and other services for virtual currency-related business activities.
It is important for the association to speak out and guide its members to strengthen self-discipline, but it is more direct and effective for the regulatory authorities to take timely action. Some people suggest that the regulatory authorities should increase the punishment of institutions that provide services in violation of regulations to serve as a warning to others.
In fact, it is not just financial institutions that should not support the speculation of virtual currency trading. At present, the packaging and promotion of investing in virtual currency as "profitable" and "getting rich overnight" can be seen everywhere. Video websites and group chat forums have so-called "big V" to attract traffic, and "seniors" in the circle of friends have "experienced people" to teach "cryptocurrency speculation" experience. Overseas platform apps can smoothly operate transactions in China...
The supervision of virtual currency trading speculation activities is not a single supervision by a single department, but a comprehensive approach. Relevant departments should participate in accordance with their respective responsibilities and implement functional supervision.
If virtual currencies such as Bitcoin are only bought and sold as virtual commodities, ordinary people have the freedom to participate in transactions at their own risk.
However, if virtual currency is packaged as a "profitable" speculative target to attract investors to flock to trading platforms, it is necessary to tighten the institutional fences and safeguard the interests of the people.
The virtual currency is still going through a sharp rise and fall, and no one knows when this "roller coaster" will reach its end. However, through a series of investigative reports, if more and more people can stay away from the risks of the "cryptocurrency circle", and put the "brakes" on the wall in time to prevent the further transmission of risks, then the original intention of Xinhua News Agency to keep a close eye on the "cryptocurrency circle" will be achieved. |
