One of 2021’s biggest stories was the China ban on Bitcoin mining. On one hand, the news affected Bitcoin’s price and gave ammunition to the nay-sayers that think that governments will outlaw Bitcoin. However, the network worked without incident. Recovered its hashrateRecord time was achieved and decentralization gained. However, a question remained. It is not clear why China was excluded from the lucrative industry they were leading.
As Bitcoin entrepreneur John Carvalho not-so-eloquently put it, “I refuse to believe that China is stupid.” There has to be a reason, even if it’s a simple one. NewsBTC decided that all the theories we had in one place would help solve this mystery for its audience.
China Ban Theory #1: The Digital Yuan CBDC
This is the simplest one. It is easy to forget about it. China has begun to crack down on the miners, NewsBTC reported: “As for the possible reasons, Bitcoin Magazine’s Lucas Nuzzi cites the upcoming Digital Yuan CBDC.” And Nuzzi said, “They’re literally rolling out their own coin (a CBDC) that will enable the mass surveillance and unbanking of dissidents.”
1. Officially banning the CCP #BitcoinIt should not be surprising.
They are literally creating their own currency (a CBDC), which will allow mass surveillance of dissidents and bankrupting them.#BitcoinThat is completely at odds with it. Dictatorships don’t like freedom money.
— Lucas Nuzzi (@LucasNuzzi) June 21, 2021
So, did China kill a potential billion-dollar industry just to squash their CBDC’s competition? Does that sound like it?
China Ban Theory #2: Blackouts
Are China’s energy problems a problem? Here That same articleAnother theory was proposed by us:
“In retrospect, we should’ve seen it coming. Two months ago, after a mysterious blackout, it was only now. NewsBTC reported:
Beijing Economic and Information Bureau reported that concerns were raised about the impact of these activities on energy consumption. PengPai quotes Yu Jianing as the rotating chairman of the Blockchain Special Committee of China to say that country’s environmental requirements could lead to crypto mining being more “strictly regulated”. Jianing said this will be “inevitable.”
If this were true, however, they would decommission smaller hydropower stations.
China Ban Theory #3: Cleaner Energy Sources
We are rInformation on the small hydropower stations’ source was government-regulated media, so take it with a grain of salt. The claim contradicts theory #2 in a significant way.
“According to the article, the heyday of private power plants in China was the beginning of the century. Investors constructed thousands of hydropower stations to make a living. The regions around them saw them as both a symbol of development and an answer to their energy needs.
However, with the gradual surplus of electricity in China in recent years, the electricity generated by hydropower stations is often destined to being abandoned (commonly known as “abandonment of electricity”)”
The main purpose of decommissioning was to restore the flow of rivers. “Hydropower stations have always been one of the important factors restricting the ecology of Sichuan’s rivers,” said Wang Hua, deputy director of the Sichuan Provincial Water Resources Department. But we took it one step further.
“It’s possible that the government is trying to get rid of those plants. That would explain the article’s tone, it seems like it was trying to get investors to stay away from those hydropower stations. In light of this, China’s ban on Bitcoin mining could just be part of an even bigger play. They’re serious and methodically shaking things up over there.
Their ultimate objective? Are they just trying to make China carbon-neutral and restore the flow of rivers? Or is there something else at play here?”
However, something doesn’t add up. But, there are still some things that don’t add up. A second article is available about the banHydropower energy can be considered clean.
“Did China make the mistake of a lifetime by banning Bitcoin mining or do they have a secret plan?
The fact that the electricity for crypto mining in Sichuan came from clean hydropower meant that many thought the province would be a safe haven for Bitcoin miners.”
China Ban Theory #4: The New China Model
We explored Bloomberg’s theory about a “less founder-driven and more China-centric” model that China was supposedly exploring.
“If China is abandoning the Silicon Valley model, what will it replace it with? It will likely be less founder-driven, and more China-centric according to some insiders.
What is the reason China seems to be dwarfing some of its most important industries and major players? Is the “China Model” just concerned with scale? Is control the focus of their efforts? Are they cracking down on people and companies with too much power that work on a global scale?”
And even though it wasn’t quite believable, it introduced the concept that China was also cracking down on their biggest tech executives. Maybe this isn’t only about Bitcoin?
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China Ban Theory #5: Making Bitcoin Hard To Use
This one doesn’t explain the overarching theme of the China ban. This theory can be colored with it. In an event, Yin Youping, Deputy Director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China, said, “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 list everything the PBOC was doing to combat cryptocurrency trading.
You can find the NewsBTC Report about It“We said,
“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
Were the Chinese authorities just trying to close off the borders? They understood that It was inevitable that Evergrande would be in this situation and didn’t want people to have the Bitcoin lifeboat available. We stated in our report:
“To recap: the government saw this coming from a distance. To scare people into buying this most valuable asset, they banned Bitcoin mining because they knew it would hit repeatedly. 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 full of assumptions theoryChina has banned Bitcoin related activities every cycle in an effort to control the Bitcoin price and increase its supply. There is no reason for the country to ban this industry. Their mining profits are too high, they also control ASICs makers, as well as mining machines that inflate chips’ value, so they can control this business. 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 usually do, they sold their Bitcoin and made their shorts. China then banned Bitcoin mining, and all ASICs were turned off in the country. The world perceived the ban as real, just “look at the hashrate.” This is the first time this happens. Then, China sold a small portion of its ASICs to the USA.”
According to him, Bitcoin mining in China didn’t stop, they’re just not signing the blocks. Of course, he doesn’t have any proof, and neither do we. As with all other theories, it is only a theory.
What’s really going on in China? What’s the reason behind the great China ban of 2021? We wouldn’t know for sure, but we have many suspicions. Let’s hope 2022 gives us solid evidence, new insights, or, at least, a plausible explanation.
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