One in every of 2021’s largest tales was the China ban on Bitcoin mining. On one hand, the information did have an effect on Bitcoin’s worth and gave ammunition to the naysayers that assume that governments will outlaw Bitcoin. On the opposite, the community stored working with no hiccup, recovered its hashrate in file time, and gained in decentralization. Nevertheless, a query stays. Why did China exclude itself from this very profitable exercise through which they have been dominating?
As Bitcoin entrepreneur John Carvalho not-so-eloquently put it, “I refuse to consider that China is silly.” There must be a cause, even when it’s a easy one. To assist our viewers remedy the puzzle, NewsBTC determined to assemble all of our theories in a single put up.
China Ban Principle #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 attainable 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.”
1/ The CCP formally banning #Bitcoin ought to come as no shock.
They’re actually rolling out their very own coin (a CBDC) that can 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 Principle #2: Blackouts
Is China having vitality points? In that same article, we posed one other idea:
“On reflection, we must always’ve seen it coming. Solely two months in the past, following a suspicious blackout, NewsBTC reported:
In accordance with the Beijing Financial and Data 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 will likely be “inevitable.”
Nevertheless, would they be decommissioning small hydropower stations if this was the case?
China Ban Principle #3: Cleaner Vitality 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 idea #2:
“In accordance with the article, the heyday of personal energy vegetation in China was the start of the century. Buyers constructed hundreds 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.
Nevertheless, with the gradual surplus of electrical energy in China in recent times, the electrical energy generated by hydropower stations is usually destined to being deserted (generally referred to as “abandonment of electrical energy”)”
However, the primary cause for the decommissioning gave the impression to be repairing the unique move of the rivers. “Hydropower stations have at all times been one of many vital components 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 attainable that the federal government is making an attempt to eliminate these vegetation. That will clarify the article’s tone, it looks as if it was making an attempt to get traders to avoid these hydropower stations. In gentle of this, China’s ban on Bitcoin mining might simply be a part of an excellent greater play. They’re critical and methodically shaking issues up over there.
What could possibly be their end-game? Is China simply making an attempt to go carbon impartial and restore the unique move of the rivers? Or is there one thing else at play right here?”
Nevertheless, 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 Principle #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 is going to it exchange 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 folks and corporations with an excessive amount of energy that work on a worldwide scale?”
And although 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?
BTC worth chart for 01/02/2022 on Bitrex | Supply: BTC/USD on TradingView.com
China Ban Principle #5: Making Bitcoin Laborious To Use
This one doesn’t clarify the overarching theme of the China ban. It does add shade to no matter idea you like, although. In an occasion, Yin Youping, Deputy Director of the Monetary Shopper Rights Safety Bureau of the Individuals’s Financial institution of China, mentioned, “We remind the folks as soon as once more that digital currencies akin to Bitcoin usually are not authorized tender and don’t have any precise worth assist.” 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 attainable that The Individuals’s Financial institution of China is simply going to make it actually actually laborious for the frequent citizen to entry Bitcoin. And, China’ll use propaganda and repetition to maintain folks in verify and terrified of the unknown. One in every of Bitcoin’s prototipical adversarial eventualities. A battle that Bitcoin anticipated eventually.”
China Ban Principle #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 folks 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 towards the collapse of each economic system.”
China Ban Principle #7: FUD To Get Extra Bitcoin
In accordance with John Carvalho’s wild and full of assumptions theory, 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 idea is:
“The principle 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 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 “have a look at the hashrate.” That is the primary time this occurs. Then, China bought a small portion of its ASICs to the USA.”
In accordance with him, Bitcoin mining in China didn’t cease, they’re simply not signing the blocks. After all, he doesn’t have any proof, and neither can we. That is only a idea, like all of the others.
What’s actually happening in China? What’s the rationale behind the good China ban of 2021? We wouldn’t know for positive, however we’ve many suspicions. Let’s hope 2022 provides us strong proof, new insights, or, not less than, a believable rationalization.
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