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

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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 no hiccup, recovered its hashrate in file time, and gained in decentralization. However, 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 believe that China is stupid.” There needs to be a motive, even when it’s a easy one. To assist our viewers clear up the puzzle, NewsBTC determined to collect all of our theories in a single put up.

China Ban Theory #1:  The Digital Yuan CBDC

This one is as simple because it will get. When China began cracking down on miners, NewsBTC reported: “As for the possible reasons, Bitcoin Magazine’s Lucas Nuzzi cites the upcoming Digital Yuan CBDC.” And Nuzzi stated, “They’re literally rolling out their own coin (a CBDC) that will enable the mass surveillance and unbanking of dissidents.”

1/ The CCP formally banning #Bitcoin ought to come as no shock.

They’re actually rolling out their very own coin (a CBDC) that may allow the mass surveillance and unbanking of dissidents.#Bitcoin is at full odds with that. Dictatorships don’t love freedom cash.

— Lucas Nuzzi (@LucasNuzzi) June 21, 2021

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

China Ban Theory #2:  Blackouts

Is China having power points? In that very same article, we posed one other principle:

“In retrospect, we should always’ve seen it coming. Only two months in the past, following a suspicious blackout, NewsBTC reported:

According to the Beijing Economic and Information Bureau, there have been considerations concerning the power consumption associated to those actions. PengPai quotes Yu Jianing, rotating Chairman of the Blockchain Special Committee of China, to assert that the nation’s environmental necessities might result in crypto mining being extra “strictly regulated”. Jianing stated this shall be “inevitable.”

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

China Ban Theory #3:  Cleaner Energy 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 principle #2:

“According to the article, the heyday of personal energy vegetation in China was the start of the century. Investors constructed 1000’s of hydropower stations as a result of they noticed them as a relentless money cow. For their half, the areas close by noticed them as an indication of progress and an answer to their power issues. 

However, with the gradual surplus of electrical energy in China lately, the electrical energy generated by hydropower stations is usually destined to being deserted (generally generally known as “abandonment of electricity”)”

Nevertheless, the principle motive for the decommissioning appeared to be repairing the unique stream of the rivers. “Hydropower stations have always been one of the important factors restricting the ecology of Sichuan’s rivers,” stated Wang Hua, deputy director of the Sichuan Provincial Water Resources Department. We went a step additional:

“It’s potential that the federal government is making an attempt to do away with these vegetation. That would clarify the article’s tone, it looks like it was making an attempt to get traders to avoid these hydropower stations. In mild of this, China’s ban on Bitcoin mining might simply be a part of an excellent larger play. They’re severe and methodically shaking issues up over there. 

What may very well be their end-game? Is China simply making an attempt to go carbon impartial and restore the unique stream of the rivers? Or is there one thing else at play right here?”

However, one thing doesn’t add up. In one other article concerning the ban, we highlighted that hydropower power is clear power.

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

The undeniable fact that the electrical energy for crypto mining in Sichuan got here from clear hydropower meant that many thought the province could be a secure haven for Bitcoin miners.”

China Ban Theory #4:  The New China Model

We explored Bloomberg’s principle a few “less founder-driven and more 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 counsel it will likely be much less founder-driven and extra China-centric.

Why is China dwarfing its largest industries and gamers? Is the “China Model” 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 world scale?”

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

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

China Ban Theory #5:  Making Bitcoin Hard To Use

This one doesn’t clarify the overarching theme of the China ban. It does add coloration to no matter principle you like, although. In an occasion, Yin Youping, Deputy Director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China, stated, “We remind the people once again that virtual currencies such as Bitcoin are not legal tender and have no actual value support.” And proceeded to listing every part the PBOC was doing to fight cryptocurrency buying and selling.

In the NewsBTC report about it, we stated:

“Maybe their plan is simpler than we thought. It’s possible that The People’s Bank of China is just going to make it really really hard for the common citizen to access Bitcoin. And, China’ll use propaganda and repetition to keep people in check and scared of the unknown. One of Bitcoin’s prototipical adversarial scenarios. A battle that Bitcoin expected sooner or later.”

China Ban Theory #6: Preparing For Evergrande’s Default

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

“To recap: the government saw this coming from a distance. They knew the crisis was going to repeatedly hit the country and banned Bitcoin mining to scare the population into not buying the hardest asset ever created. Bitcoin, the true hedge against the collapse of every economy.”

China Ban Theory #7: FUD To Get More Bitcoin

According to John Carvalho’s wild and stuffed with assumptions principle, China bans one thing associated to Bitcoin each cycle to govern the value and get extra BTC. The nation has no incentive to ban the business. They make an excessive amount of cash mining, plus they management the ASICs producers, plus mining machines inflate the worth of chips, and so they management that enterprise too. So, Carvalho’s principle is:

“The main ASIC manufacturer, the Chinese company Bitmain, had a new generation of miners ready. So, the CCP “decided to create a demand for the aftermaket and combine it with the FUD.” As they normally do, they bought 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 “look at the hashrate.” This is the primary time this occurs. Then, China bought a small portion of its ASICs to the USA.”

According to him, Bitcoin mining in China didn’t cease, they’re simply not signing the blocks. Of course, he doesn’t have any proof, and neither will we. This is only a principle, like all of the others.

What’s actually occurring in China? What’s the explanation behind the nice China ban of 2021? We wouldn’t know for certain, however now we have many suspicions. Let’s hope 2022 provides us strong proof, new insights, or, no less than, a believable rationalization.

Featured Image by PublicDomainPictures on Pixabay | Charts by TradingView

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