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“Did China really ban bitcoin mining???” 😱
I’ve received multiple versions of this question from people today, so I dug into this a bit more for a coherent answer. Posting in a tweet thread so everyone can see my response.
I’ve received multiple versions of this question from people today, so I dug into this a bit more for a coherent answer. Posting in a tweet thread so everyone can see my response.
Before I start, I would encourage you all to read Dovey’s tweet thread on this topic.
1/ Now onto some background: China’s National Development and Reform Commission is the agency that has pretty broad powers in the planning and control of the Chinese economy.
Because of its broad powers, the agency is often called the ‘mini-Central government’.
Because of its broad powers, the agency is often called the ‘mini-Central government’.
2/ Since 2005, the agency has maintained a publicly available list of the industries that the state i) would like to encourage, ii) those they would like to limit, and iii) those they would like to eliminate. The list gets updated and amended every few years.
3/ The last official update was done in 2016, which added things like wind farms as an example of something to be encouraged and harmful beverage packaging as something to be eliminated. Things not listed are defaulted to 'permitted' by the agency.
4/ The most recent **proposed** changes to the list was published this week— again, note that these are proposed changes, and this is still in the commenting process.
So, NOTHING IS SET IN STONE YET- comments close May 7th!
So, NOTHING IS SET IN STONE YET- comments close May 7th!
5/ Where the concern within the crypto circle lies is in *ONE* tiny line item among the THOUSANDS of industries within the list. Under the 'elimination section': 'The ‘mining’ of virtual currencies (such as the mining process for bitcoin and other virtual currencies).” 
6/ The guidelines for the elimination section has always been those industry/activities that are wasteful or harmful to the environment, do not meet safety standards, or uses too much out-dated equipment. According to that line of thinking, POW mining falls under the first type.
7/ So what does this all mean??????
8/ I don't want to downplay the potential signifigance of this if the line item were to make it to the final list-- the Chinese government is deliberate in anything that is made publically avalible, so this would 100% raise some concern + red plags.
9/ That being said, this is one type of activity among literally THOUSANDS that gets listed. Also, as people have pointed out, this type of activity can never truly be 100% 'banned'-- like with marijuana farms etc-- people will still do shit they want to do. It's just riskier.
10/ In the immediate term, I think local mining farms will continue to operate- rules take time to shape up. But I'm not sure how these large China-based mining firms (ex. Bitmain) will operate-- it's already known that Bitmain seems to be shifting more towards AI by the day.
11/ TLDR until the rules are set in stone and we actually SEE large mining farms move or shut down, we're all just reading tea leaves here. All I can do is provide background and context and my take on what it may mean. The reality (as it often does) may play out differently.
12/ ALSO!!!! I have no idea how individual provinces will react to this!!! There are definitely provinces where the mining farms congregate in-- and I have no idea what the individual provincial government will do/ if they will prioritize enforcing this.
13/ Lastly, I will leave you all with the 131-page source document here gys.ndrc.gov.cn/cyjgtzzdml2019… …
It's in Chinese, but it will give you an idea of just HOW MANY types of industries + activities gets listed by the agency. The one we are talking about takes up just one line here.
It's in Chinese, but it will give you an idea of just HOW MANY types of industries + activities gets listed by the agency. The one we are talking about takes up just one line here.
