The Misunderstood Tale of Bitcoin Mining’s Survival in China, Was There Never an Official Bitcoin Mining Ban?
- China’s Bitcoin mining still contributes 15% to the global hashrate despite reports of an official ban.
- China’s 2021 Bitcoin mining ban was a temporary suspension, not a permanent shutdown.
- China’s Bitcoin mining operations rely mainly on hydroelectric power, aligning with its carbon neutrality goals.
Recent findings reveal that Bitcoin mining in China was never officially banned, contrary to popular belief. According to environmental analyst Daniel Batten, what was perceived as a ban was actually a temporary suspension.
🇨🇳 #Bitcoin Mining Was Never Banned In China, by @DSBatten
Despite widespread reports, Bitcoin mining was never banned in China. Publicly available legislation & hash rate data tell a different story.#FUDFighters powered by @HIVEDigitalTech https://t.co/j6osCsFpaT
— Bitcoin Magazine (@BitcoinMagazine) August 28, 2024
Bitcoin Mining Continues in China
According to Batten’s research, China’s hashrate, the computing power utilized in Bitcoin mining, presently accounts for approximately 15% of the global amount. This contradicts the widely accepted narrative from May 2021, which claimed a sweeping crackdown on cryptocurrency activities by the Chinese government.
The drop in the network hashrate, which fell by 51.1% following the so-called ban, was temporary and misinterpreted as a permanent shutdown.
Investigations post-ban indicate that many miners remained operational. Reports from CNBC and NBC highlighted ongoing mining activities within China. According to Cambridge data, by December 2021, China’s mining activity has risen to account for 19.1% of worldwide hashrate, indicating a rapid recovery.
A New Perspective on China’s Bitcoin Mining
Batten explains that China’s approach to Bitcoin mining is more complicated than previously understood. He notes that local governments often support small-scale mining operations, especially those utilizing renewable energy. This support is particularly strong in regions like Inner Mongolia, which has abundant renewable energy.
Batten also points out that there is no off-grid coal mining in China anymore, with the majority of activities dependent on hydroelectric power. This is consistent with China’s overall objective is to reduce carbon emissions and become carbon neutral by 2060.
Correcting the Narrative
Batten’s findings challenge the mainstream portrayal of China’s stance on Bitcoin mining, which he argues has been misreported by Western media. Jaran Mellerud from Hashlabs supports this view, noting that several large miners still operate in China, with local governments allowing them to continue as they contribute to local economic activity.
The view alters the story, implying that China’s policies on Bitcoin mining are not as unfriendly as previously envisioned. Instead, the country appears to regulate the business in a way that strikes a balance between environmental concerns and economic interests.
Batten’s research and subsequent reports demonstrate the endurance of Bitcoin mining in China, emphasizing the significance of reliable reporting in understanding global bitcoin dynamics.