Today, Crypto Twitter influencers and media began to circulate rumors that China regrets its crackdown on crypto after Bitcoin hit new all-time highs over the past week. As has been well documented, China’s Bitcoin mining ban has caused a exodus of minors from China, which once controlled over 50% of Bitcoin’s global hashrate.
Those of us from China who know how the country’s government works are very skeptical, and not just because we haven’t seen any serious media coverage about it.
But it’s still interesting how this misunderstanding came about.
The rumor probably arose for two reasons. First, on October 21, the National Development and Reform Commission of China declared that it would add “virtual currency mining” to its list of industries eliminated after seeking public opinion; when an industry is added to the list, it effectively ceases to exist in mainland China.
While China’s National Development and Reform Commission seems a bit out of place in the country’s current market economy, its word remains binding.
The commission first launched virtual currency mining for the list in 2019, but after seeking an opinion, the industry was removed from the final announced list. Some therefore believe that public opinion could save the industry again.
But it’s impossible. In 2020, China made a global commitment to carbon neutrality, and Chinese policymakers believe Bitcoin mining wastes energy and undermines its climate efforts, one of its biggest political priorities. The political pressure on Bitcoin mining was much weaker in 2019, when public opinion avoided a crackdown, than it is in 2021. And it is a small number of miners in 2019 that has successfully put pressure on the government; The wider public opinion in China is actually opposed to Bitcoin mining because it doesn’t create jobs and miners don’t pay taxes.
Second, the commission reprinted news than the United States overtook China to become the largest Bitcoin mining country. Does this imply that the committee regrets the events which led to this?
We don’t know for sure, but the likelihood is very low. It can also be interpreted from another angle: Some Chinese government officials may believe that more Bitcoin mining will disrupt America’s carbon neutrality and disrupt its financial order. So, amplifying this news might just be a form of jubilation. Moreover, this news could simply be interpreted by senior Chinese government officials to mean that the country has completed the task of tackling Bitcoin mining.
Aside from these misunderstandings, what is the real status of crypto mining in China today? I must say: it is very strict.
Inspections filtered down to small local governments, which use network technology to find mining IP addresses. A large number of mining companies have been dissolved and almost all, including those centered around Filecoin, are leaving China. And while the research and development of Bitcoin chips and mining machines remains in China for the time being, Bitmain has announcement that it will not be shipped to Chinese users.
In short, Bitcoin mining has become the enemy of carbon neutrality in the eyes of China. Just watch a new report from China’s top official economic media that States: “Bitcoin mining has high power consumption, high pollution, high damage, and low efficiency. He will only compete for precious power and waste enormous resources. ”
It’s clear that China’s Bitcoin mining industry, which once dominated the world, is on the verge of exiting the market altogether, and it’s hard to imagine its return in the foreseeable future.