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 disallow Bitcoin. On the other, the network kept working without a misstep, recuperated its hashrate in record time, and acquired in decentralization. A concern stays. Why did China omit itself from this extremely financially rewarding activity in which they were controling?
As Bitcoin business owner John Carvalho not-so-eloquently put it, “I decline to think that China is silly.” There needs to be a factor, even if it’s a basic one. To assist our audience resolve 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 factors, Bitcoin Magazine’s Lucas Nuzzi mentions the upcoming Digital Yuan CBDC.” And Nuzzi stated, “They’re actually presenting their own coin (a CBDC) that will make it possible for the mass security 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 allow 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 prospective 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 very same short article, we positioned another theory:
” In retrospection, we must’ve seen it coming. Just 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 prices estimate Yu Jianing, turning Chairman of the Blockchain Special Committee of China, to declare that the nation’s ecological requirements might cause crypto mining being more “strictly controlled” Jianing stated this will be “inescapable.”
However, would they be decommissioning little hydropower stations if this held true?
China Ban Theory # 3: Cleaner Energy Sources
Our r eport 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. Financiers constructed countless hydropower stations due to the fact that they saw them as a continuous golden goose. For their part, the areas neighboring saw them as an indication of development and an option to their energy issues.
However, with the progressive surplus of electrical power in China in the last few years, the electrical power produced by hydropower stations is typically predestined to being deserted (frequently referred to as “desertion of electrical energy”)”
Nevertheless, the primary factor for the decommissioning appeared to be fixing the initial circulation of the rivers. “Hydropower stations have actually constantly been among the crucial elements limiting 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 appears like it was attempting to get financiers to keep away from those hydropower stations. Due to this, China’s restriction on Bitcoin mining might simply belong to an even larger play. They’re severe 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 does not accumulate. 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 reality that the electrical energy for crypto mining in Sichuan originated from tidy hydropower indicated that numerous 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? Experts recommend it will be less founder-driven and more China-centric.
Why is China overshadowing its greatest markets and gamers? Is the “China Model” simply worried about scale? Or is control their focus? Are they punishing individuals and business with excessive power that deal with a worldwide scale?”
And despite the fact that it wasn’t rather credible, it presented the idea that China was likewise punishing their most significant tech executives. Perhaps this isn’t just about Bitcoin?
BTC cost chart for 01/02/2022 on Bitrex|Source: BTC/USD on TradingView.com
China Ban Theory # 5: Making Bitcoin Hard To Use
This one does not discuss the overarching style of the China restriction. It does include color to whatever theory you choose. In an occasion, Yin Youping, Deputy Director of the Financial Consumer Rights Protection Bureau of individuals’s Bank of China, stated, “We advise individuals when again that virtual currencies such as Bitcoin are illegal tender and have no real worth assistance.” And continued to note whatever the PBOC was doing to fight cryptocurrency trading.
In the NewsBTC report about it, we stated:
” Maybe their strategy is easier than we believed. It’s possible that The People’s Bank of China is simply going to make it actually truly tough for the typical resident to gain access to Bitcoin. And, China’ll utilize propaganda and repeating to keep individuals in check and terrified of the unidentified. Among Bitcoin’s prototipical adversarial situations. A fight that Bitcoin anticipated eventually.”
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 unavoidable and didn’t desire individuals to have the Bitcoin lifeboat readily available. In our report, we stated:
” To summarize: the federal government saw this originating from a range. They understood the crisis was going to consistently strike the nation and prohibited Bitcoin mining to frighten the population into not purchasing the hardest property ever developed. Bitcoin, the real hedge versus the collapse of every economy.”
China Ban Theory # 7: FUD To Get More Bitcoin
According to John Carvalho’s wild and loaded 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 organization too. Carvalho’s theory is:
” The primary ASIC producer, the Chinese business Bitmain, had a brand-new generation of miners prepared. The CCP “chose to develop a need for the aftermaket and integrate it with the FUD.” As they normally do, they offered their Bitcoin and made their shorts. China prohibited Bitcoin mining and the entire nation turned off the ASICs. The world viewed the restriction as genuine, simply “take a look at the hashrate.” This is the very first time this takes place. China offered a little part of its ASICs to the USA.”
According to him, Bitcoin mining in China didn’t stop, they’re simply not signing the blocks. Obviously, he does not 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 would not understand for sure, however we have lots of suspicions. Let’s hope 2022 provides us strong proof, brand-new insights, or, a minimum of, a possible description.
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