Is China About to Reverse Its Bitcoin Mining Ban? This is What’s Actually Going On

At the moment, Crypto Twitter influencers and media started circulating rumors that China was regretting its crackdown on crypto after Bitcoin surged to new all-time-highs prior to now week. As has been effectively documented, China’s Bitcoin mining ban induced an exodus of miners out of China, which as soon as managed greater than 50% of Bitcoin’s world Bitcoin hashrate.

These of us from China, who know the way the nation’s authorities operates, are extremely skeptical—and never simply because we’ve not seen any severe media protection of this. 

Nevertheless it’s nonetheless attention-grabbing to take a look at how this misunderstanding arose. 

The rumor seemingly got here into being for 2 causes. First, on October 21, China’s Nationwide Growth and Reform Fee stated that it might add “digital forex mining” to its listing of eradicated industries after it solicits public opinions; when an business is added to the listing, it successfully ceases to exist inside mainland China. 

Whereas the Nationwide Growth and Reform Fee of China appears a little bit misplaced within the nation’s present market economic system, its phrase stays binding.

The fee first floated digital forex mining for the listing in 2019, however after soliciting opinion, the business was taken off the ultimate introduced listing. Due to this fact, some individuals assume that public opinion may save the business once more. 

However that is not possible. In 2020, China made a world dedication to carbon neutrality, and Chinese language policymakers consider that Bitcoin mining wastes vitality and undermines its local weather efforts, one in every of its largest coverage priorities.

The political strain on Bitcoin mining was a lot smaller in 2019, when public opinion averted a crackdown, than it’s in 2021.

Second, the fee reprinted news that the USA has surpassed China to develop into the biggest Bitcoin mining nation. Does this suggest that the fee regrets the occasions that led to this?

We do not know for positive, however the chance could be very low. It may also be interpreted from one other angle: Some Chinese language authorities officers might imagine that extra Bitcoin mining will disrupt America’s carbon neutrality and disrupt its monetary order. Thus the amplification of this information may simply be a type of gloating. Furthermore, this information may merely be taken by Chinese language authorities higher-ups to imply that the nation has efficiently accomplished the duty of combating Bitcoin mining. 

Placing apart these misunderstandings, what’s the actual standing of crypto mining in China now? I’ve to say: it’s very strict. 

Inspections have filtered all the best way right down to small native governments, that are utilizing community expertise to search out mining IPs. Numerous mining corporations have dissolved and nearly all of them, together with these centered round Filecoin, are shifting out of China. And whereas analysis and improvement of Bitcoin mining chips and machines stays in China in the intervening time, Bitmain has introduced that it’s going to not ship to Chinese language customers.

In brief, Bitcoin mining has develop into the enemy of carbon neutrality in China’s eyes. Simply have a look at a brand new report from China’s highest-level official financial media that states: “Bitcoin mining has excessive vitality consumption, excessive air pollution, excessive hurt, and low output. It’s going to solely compete for valuable energy and waste large sources.” 

It’s clear that China’s Bitcoin mining business, which as soon as dominated the world, is about to completely withdraw from the market, and it is arduous to think about its return within the foreseeable future.

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