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    HomeBitcoinWhy Did China Ban Bitcoin Mining? Here Are The Seven Leading Theories

    Why Did China Ban Bitcoin Mining? Here Are The Seven Leading Theories

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    Certainly one of 2021’s largest tales was the China ban on Bitcoin mining. On one hand, the information did have an effect on Bitcoin’s value and gave ammunition to the naysayers that suppose that governments will outlaw Bitcoin. On the opposite, the community saved working with out a hiccup, recovered its hashrate in document time, and gained in decentralization. Nonetheless, a query stays. Why did China exclude itself from this very profitable exercise through which they had been dominating?

    As Bitcoin entrepreneur John Carvalho not-so-eloquently put it, “I refuse to consider that China is silly.” There needs to be a motive, even when it’s a easy one. To assist our viewers clear up the puzzle, NewsBTC determined to assemble all of our theories in a single publish.

    China Ban Idea #1:  The Digital Yuan CBDC

    This one is as simple because it will get. When China started cracking down on miners, NewsBTC reported: “As for the doable causes, Bitcoin Journal’s Lucas Nuzzi cites the upcoming Digital Yuan CBDC.” And Nuzzi mentioned, “They’re actually rolling out their very own coin (a CBDC) that can allow the mass surveillance and unbanking of dissidents.”

    So, did China kill a possible billion-dollar trade simply to squash their CBDC’s competitors? Is that it?

    China Ban Idea #2:  Blackouts

    Is China having vitality points? In that same article, we posed one other concept:

    “Looking back, we must always’ve seen it coming. Solely two months in the past, following a suspicious blackout, NewsBTC reported:

    In response to the Beijing Financial and Info Bureau, there have been issues in regards to the vitality consumption associated to those actions. PengPai quotes Yu Jianing, rotating Chairman of the Blockchain Particular Committee of China, to assert that the country’s environmental requirements could lead to crypto mining being more “strictly regulated”. Jianing mentioned this shall be “inevitable.”

    Nonetheless, would they be decommissioning small hydropower stations if this was the case?

    China Ban Idea #3:  Cleaner Power Sources

    Our report on small hydropower stations’ supply was government-regulated media, so take it with a grain of salt. It begins with a declare that clashes closely with concept #2:

    “In response to the article, the heyday of personal energy crops in China was the start of the century. Traders constructed 1000’s of hydropower stations as a result of they noticed them as a continuing money cow. For his or her half, the areas close by noticed them as an indication of progress and an answer to their vitality issues. 

    Nonetheless, with the gradual surplus of electrical energy in China in recent times, the electrical energy generated by hydropower stations is commonly destined to being deserted (generally generally known as “abandonment of electrical energy”)”

    Nonetheless, the primary motive for the decommissioning gave the impression to be repairing the unique circulation of the rivers. “Hydropower stations have at all times been one of many vital elements limiting the ecology of Sichuan’s rivers,” mentioned Wang Hua, deputy director of the Sichuan Provincial Water Assets Division. We went a step additional:

    “It’s doable that the federal government is attempting to do away with these crops. That will clarify the article’s tone, it looks like it was attempting to get buyers to steer clear of these hydropower stations. In mild of this, China’s ban on Bitcoin mining might simply be a part of a good greater play. They’re severe and methodically shaking issues up over there. 

    What could possibly be their end-game? Is China simply attempting to go carbon impartial and restore the unique circulation of the rivers? Or is there one thing else at play right here?”

    Nonetheless, one thing doesn’t add up. In another article about the ban, we highlighted that hydropower vitality is clear vitality.

    “Did China make the error of a lifetime by banning Bitcoin mining or have they got a secret plan?

    The truth that the electrical energy for crypto mining in Sichuan got here from clear hydropower meant that many thought the province can be a protected haven for Bitcoin miners.”

    China Ban Idea #4:  The New China Mannequin

    We explored Bloomberg’s theory a couple of “much less founder-driven and extra China-centric” mannequin that China was supposedly exploring.

    “If China is abandoning the Silicon Valley mannequin, what’s going to it change it with? Insiders recommend will probably be much less founder-driven and extra China-centric.

    Why is China dwarfing its largest industries and gamers? Is the “China Mannequin” simply involved with scale? Or is management their focus? Are they cracking down on individuals and corporations with an excessive amount of energy that work on a worldwide scale?”

    And though it wasn’t fairly plausible, it launched the idea that China was additionally cracking down on their largest tech executives. Possibly this isn’t solely about Bitcoin?

    BTCUSD price chart for 01/02/2022 - TradingView

    BTC value chart for 01/02/2022 on Bitrex | Supply: BTC/USD on TradingView.com

    China Ban Idea #5:  Making Bitcoin Arduous To Use

    This one doesn’t clarify the overarching theme of the China ban. It does add colour to no matter concept you like, although. In an occasion, Yin Youping, Deputy Director of the Monetary Client Rights Safety Bureau of the Individuals’s Financial institution of China, mentioned, “We remind the individuals as soon as once more that digital currencies equivalent to Bitcoin usually are not authorized tender and don’t have any precise worth help.” And proceeded to listing every part the PBOC was doing to fight cryptocurrency buying and selling.

    Within the NewsBTC report about it, we mentioned:

    “Possibly their plan is less complicated than we thought. It’s doable that The Individuals’s Financial institution of China is simply going to make it actually actually laborious for the widespread citizen to entry Bitcoin. And, China’ll use propaganda and repetition to maintain individuals in test and terrified of the unknown. Certainly one of Bitcoin’s prototipical adversarial situations. A battle that Bitcoin anticipated ultimately.”

    China Ban Idea #6: Getting ready For Evergrande’s Default

    Was the Chinese language authorities simply closing the exits? They knew that the Evergrande situation was inevitable and didn’t need individuals to have the Bitcoin lifeboat obtainable. In our report, we mentioned:

    “To recap: the federal government noticed this coming from a distance. They knew the disaster was going to repeatedly hit the nation and banned Bitcoin mining to scare the inhabitants into not shopping for the toughest asset ever created. Bitcoin, the true hedge in opposition to the collapse of each financial system.”

    China Ban Idea #7: FUD To Get Extra Bitcoin

    In response to John Carvalho’s wild and full of assumptions theory, China bans one thing associated to Bitcoin each cycle to control the worth and get extra BTC. The nation has no incentive to ban the trade. They make an excessive amount of cash mining, plus they management the ASICs producers, plus mining machines inflate the worth of chips, they usually management that enterprise too. So, Carvalho’s concept is:

    “The primary ASIC producer, the Chinese language firm Bitmain, had a brand new era of miners prepared. So, the CCP “determined to create a requirement for the aftermaket and mix it with the FUD.” As they often do, they offered their Bitcoin and made their shorts. Then, China banned Bitcoin mining and the entire nation turned off the ASICs. The world perceived the ban as actual, simply “take a look at the hashrate.” That is the primary time this occurs. Then, China offered a small portion of its ASICs to the USA.”

    In response to him, Bitcoin mining in China didn’t cease, they’re simply not signing the blocks. In fact, he doesn’t have any proof, and neither will we. That is only a concept, like all of the others.

    What’s actually happening in China? What’s the rationale behind the nice China ban of 2021? We wouldn’t know for certain, however now we have many suspicions. Let’s hope 2022 offers us strong proof, new insights, or, at the very least, a believable rationalization.

    Featured Picture by PublicDomainPictures on Pixabay | Charts by TradingView





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