China Never Banned Bitcoin Mining, Researcher Reveals

China Never Banned Bitcoin Mining, Researcher Reveals

EconomyChina

By Jakub Lazurek

07 Jun 2024 (12 days ago)

2 min read

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Researcher Daniel Batten reveals Bitcoin mining was never officially banned in China, correcting widespread misconceptions and highlighting resumed activities.

In a surprising revelation, Bitcoin environmental analyst Daniel Batten disclosed that Bitcoin mining was never officially banned in China. Despite widespread reports, Batten’s research shows that the “ban” was a temporary suspension, and mining activities have largely resumed.

Batten's report highlights that China's hashrate, the measure of computational power used in Bitcoin mining, currently makes up about 15% of the global total. This contradicts reports from May 2021, when news outlets claimed a total crackdown on cryptocurrency transactions and mining by the Chinese government. Batten argues that the drop in hashrate—from 179.2 EH/s to 87.7 EH/s—was temporary. He likens it to a student being suspended, not expelled.

Further investigations support Batten’s claim. Reports right after the “ban” indicated that many miners continued their operations. CNBC and NBC both reported ongoing mining activities in China. By December 2021, mining activity had rebounded to 19.1% of the global hashrate, according to Cambridge data.

“We’ve talked to multiple mining companies in China. The message is clear: if you’re small, useful, and not using it to move money out of China, you’re welcome,” said Batten. This approach has made Bitcoin mining more distributed and cleaner. Innovative uses of Bitcoin mining in China include harvesting wasted renewable energy and recycling heat. Provincial governments often support small-scale operations that help local energy solutions without breaking capital controls. “If you have 200-500 miners and want to use renewable energy, you’re welcome,” Batten stated, particularly pointing to Inner Mongolia, which has a lot of wasted renewable power.

Moreover, off-grid coal-based mining has ceased. “Mining is mostly hydro, much of which is sub-1MW,” Batten revealed. This aligns with China’s goal of achieving carbon neutrality by 2060. The supposed Bitcoin mining “ban” was part of broader efforts to reduce energy consumption in high-use industries.

Batten argues that Western media has largely misreported these dynamics, perpetuating a false narrative about China’s stance on Bitcoin mining. Jaran Mellerud from Hashlabs supports this view, noting that big miners still operate in China because local governments need economic activity.

These findings challenge mainstream media’s portrayal of China’s policies and highlight a pattern of misinterpretation in reporting on Bitcoin mining regulations worldwide. Batten’s research suggests that Bitcoin mining in China was only temporarily suspended and has since resumed, supported by local governments and using cleaner energy sources. This narrative corrects the misconception of a total ban and underscores the importance of accurate reporting in the cryptocurrency industry.

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