One of 2021’s most significant stories was the China restriction on Bitcoin mining. On one hand, the news did impact Bitcoin’s rate and offered ammo to the cynics that believe that federal governments will forbid Bitcoin. On the other, the network kept working without a misstep, recuperated its hashrate in record time, and gotten in decentralization. However, a concern stays. Why did China omit itself from this really rewarding activity in which they were controling?
As Bitcoin business owner John Carvalho not-so-eloquently put it, “I refuse to believe that China is stupid.” There needs to be a factor, even if it’s an easy one. To assist our audience fix the puzzle, NewsBTC chose to collect all of our theories in a single post.
China Ban Theory #1: The Digital Yuan CBDC
This one is as uncomplicated as it gets. When China began punishing 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 prohibiting #Bitcoin ought to come as not a surprise.
They’re actually presenting their own coin (a CBDC) that will make it possible for the mass security and unbanking of dissidents.#Bitcoin is at total chances with that. Dictatorships do not like liberty cash.
— Lucas Nuzzi (@LucasNuzzi) June 21, 2021
So, did China eliminate a possible billion-dollar market simply to squash their CBDC’s competitors? Is that it?
China Ban Theory #2: Blackouts
Is China having energy concerns? In that exact same post, we postured another theory:
“In retrospection, we ought to’ve seen it coming. Only 2 months back, following a suspicious blackout, NewsBTC reported:
According to the Beijing Economic and Information Bureau, there were issues about the energy intake associated to these activities. PengPai quotes Yu Jianing, turning Chairman of the Blockchain Special Committee of China, to declare that the nation’s ecological requirements might result in crypto mining being more “strictly regulated”. Jianing stated this will be “inevitable.”
However, would they be decommissioning little hydropower stations if this held true?
China Ban Theory #3: Cleaner Energy Sources
Our report on little hydropower stations’ source was government-regulated media, so take it with a grain of salt. It begins with a claim that clashes greatly with theory #2:
“According to the post, the prime time of personal power plants in China was the start of the century. Investors developed countless hydropower stations due to the fact that they saw them as a consistent golden goose. For their part, the areas neighboring saw them as an indication of development and a service to their energy issues.
However, with the progressive surplus of electrical energy in China in the last few years, the electrical energy created by hydropower stations is frequently predestined to being deserted (frequently referred to as “abandonment of electricity”)”
Nevertheless, the primary factor for the decommissioning appeared to be fixing the initial circulation 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 an action even more:
“It’s possible that the federal government is attempting to eliminate those plants. That would describe the post’s tone, it looks like it was attempting to get financiers to keep away from those hydropower stations. In light of this, China’s restriction on Bitcoin mining might simply become part of an even larger play. They’re major and systematically shaking things up there.
What could be their end-game? Is China simply attempting to go carbon neutral and fix the initial circulation of the rivers? Or exists something else at play here?”
However, something doesn’t build up. In another post about the restriction, we highlighted that hydropower energy is tidy energy.
“Did China make the error of a life time by prohibiting Bitcoin mining or do they have a secret strategy?
The truth that the electrical energy for crypto mining in Sichuan originated from tidy hydropower suggested that lots of believed the province would be a safe house for Bitcoin miners.”
China Ban Theory #4: The New China Model
We checked out Bloomberg’s theory about a “less founder-driven and more China-centric” design that China was apparently checking out.
“If China is deserting the Silicon Valley design, what will it change it with? Insiders recommend it will be less founder-driven and more China-centric.
Why is China overshadowing its most significant markets and gamers? Is the “China Model” simply worried about scale? Or is manage their focus? Are they punishing individuals and business with excessive power that deal with an international scale?”
And although it wasn’t rather credible, it presented the idea that China was likewise punishing their most significant tech executives. Maybe this isn’t just about Bitcoin?
BTC rate 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 describe the overarching style of the China restriction. It does include color to whatever theory you choose, however. 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 continued to note whatever the PBOC was doing to fight cryptocurrency trading.
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 federal government simply closing the exits? They understood that the Evergrande scenario was inescapable and didn’t desire individuals to have the Bitcoin lifeboat offered. 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 filled with presumptions theory, China prohibits something associated to Bitcoin every cycle to control the rate and get more BTC. The nation has no reward to prohibit the market. They make excessive cash mining, plus they manage the ASICs producers, plus mining makers pump up the worth of chips, and they manage that company too. So, Carvalho’s theory 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 offered their Bitcoin and made their shorts. Then, China prohibited Bitcoin mining and the entire nation shut off the ASICs. The world viewed the restriction as genuine, simply “look at the hashrate.” This is the very first time this occurs. Then, China offered a little part of its ASICs to the U.S.A..”
According to him, Bitcoin mining in China didn’t stop, they’re simply not signing the blocks. Of course, he doesn’t have any evidence, and neither do we. This is simply a theory, like all the others.
What’s truly going on in China? What’s the factor behind the terrific China restriction of 2021? We wouldn’t understand for sure, however we have lots of suspicions. Let’s hope 2022 offers us strong proof, brand-new insights, or, a minimum of, a possible description.
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