Bitcoin Mining Was Never Banned In China

In a striking revelation that challenges widely-held perceptions, Daniel Batten, a Bitcoin environmental impact analyst, disclosed that BTC mining was never officially banned in China.

Bitcoin mining was never officially banned in China, despite widespread reports to the contrary, according to new research.

The so-called “ban” was actually a temporary suspension, and mining activities have largely resumed across the country, the research found.

Bitcoin’s hashrate within China currently accounts for approximately 15% of the global total, the research showed.

This information stands in stark contrast to the dominant narrative that emerged in May 2021, when numerous major news outlets reported a comprehensive crackdown on cryptocurrency transactions and mining operations by the Chinese government.

At the time, the reports indicated that the government had banned cryptocurrency mining and declared that it would provide greater oversight of transactions involving digital assets in the country.

However, a closer examination of the events and subsequent reports reveals a more nuanced and less definitive picture.

The報導following the “ban” suggested that many miners remained operational and unfazed. Both CNBC and NBC reported on ongoing mining activities within China.

Furthermore, by December 2021, mining activity had rebounded to 19.1% of the global hashrate, according to Cambridge data, signaling a significant recovery.

“We’ve talked to multiple mining companies and mining distributers in China,” said Daniel Batten, a Bitcoin environmental impact analyst who conducted the research on the mining ban. “The message is clear: if you’re small, useful and not using it to get money out of China, you’re welcome.”

According to Batten, this philosophy has made Bitcoin mining more distributed and more clean-energy based.

Some of the innovative uses of Bitcoin mining in China include harvesting wasted renewable energy and recycling heat, the research noted.

This points to a more varied approach towards Bitcoin mining in the country than previously understood.

Batten also highlighted that local provincial governments often actively support Bitcoin mining, especially when it involves small-scale operations that contribute to local energy solutions without attempting to circumvent capital controls.

“If you have 200-500 miners and want to do renewable-energy mining, you’re welcome,” he said. “This is particularly in Inner Mongolia, the Texas of China, which has a lot of wasted renewable power they want to monetize.”

According to Batten, there’s no off-grid coal-based mining any more. “Mining is mostly hydro, much of which is sub-1MW,” he stated. This is in line with China’s commitment to achieving carbon neutrality by 2060, the research noted.

The Bitcoin mining “ban” seems part of a broader effort to reduce the energy intensity of high-consumption industries, the research suggested.

“The Western media largely misreported these dynamics,” Batten said in his report. “This misunderstanding has perpetuated a false narrative about China’s stance on Bitcoin mining, which I aim to correct.”

Supporting Batten’s perspective, Jaran Mellerud from Hashlabs noted, “There are still several big miners operating in China. The local government lets them operate as they desperately need economic activity there.”