China To Make Decision On Banning Bitcoin Mining Industry

Daniel Fowler
April 12, 2019

China's National Development and Reform Commission (NDRC), the top economic planning agency, stated earlier this week that it is seeking the opinion of the public with regards to the companies included in the revised list of industries to ban.

It did not stipulate a target date or plan for how to eliminate bitcoin mining, meaning that such activities should be phased out immediately, the document said.

China is home to some of the world's largest cryptocurrency mining farms - data centres hosting the mining rigs - thanks to cheap electricity in the country's coal-rich Xinjiang and Inner Mongolia regions. While cryptocurrency mining might require large amounts of electricity, Bitcoiners often argue it's not necessarily wasteful or polluting.

Bitcoin listed among 450 items that NDRC believes should be banned. Bitcoin mining is the process used to secure and verify bitcoin transactions from one user to another on bitcoin's blockchain with those mining rewarded in payments of bitcoin. "After many clampdowns, most of the mining farms now operate in a somewhat grey area".

Michael Zhong, an analyst with Beijing-based cryptocurrency research firm TokenInsight said that if the new rules are enacted, Chinese miners will have to give up their bases in Yunnan and Sichuan and move operations to foreign countries.

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It's estimated Chinese miners account for around 70% of global Bitcoin mining output.

Two of the giant Bitcoin mining equipment manufacturers, Bitmain and Canaan, were primarily proposing to go public and collect billions of dollars of funds in Hong Kong, but the firms have suddenly let their initial public offerings stagnate since their proclamations.

This is not the first time authorities have cracked down on cryptocurrency mining. It will be suggesting new laws that reflect crypto mining abilities which is not good capital and which will further add pollution.

In the latest iteration of the aforementioned draft, the cryptocurrency mining industry, as well as some other crypto related activities, stand out quite blatantly.

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