China “bans” Bitcoin mining, one year later the nation’s contributions to the Bitcoin mining network are second only to the United States.
According to the Cambridge Centre for Alternative Finance, China is once again a major Bitcoin miner despite a prohibition last year.
To the CCAF’s Bitcoin Electricity Consumption Index (CBECI), China’s contribution to the bitcoin mining network was second only to the US.
China’s participation was 0% in July and August after a crackdown on Bitcoin mining last year.
CCAF’s latest figures reveal the figure was 22.29% in September and 20% in October-January.
This suggests that underground mining activity has been underway in China
“Access to off-grid electricity and geographically scattered small-scale operations are among the major means used by underground miners to hide their operations from authorities and circumvent the ban,” the CCAF said in a statement.
The rapid dip to 0% in July and August, followed by a quick rise in subsequent months, implies miners were working discreetly and utilizing international proxy services to avoid investigation.
Kazakhstan, for example, seemed to be a popular choice for miners.
According to CBECI, Central Asia’s network share surpassed 18% in August 2017.
By September, miners may have realized international proxy services were working and no longer needed to disguise their China activities.
How many bans does that make for China now?
Since 2009, China and Hong Kong have on at least 19 distinct occasions “banned” or otherwise generated fear, uncertainty, and doubt (FUD) surrounding Bitcoin.
In 2009, China “banned” virtual currency
- 1. The Chinese government’s regulatory bodies have not exactly been Bitcoin enthusiasts up to this point. In 2009, when digital currencies were still in their infancy, China’s Ministry of Culture and Ministry of Commerce prohibited the use of “virtual currency” for trade of real-world commodities. This was done in an effort to protect consumers from potential fraud. Despite the fact that it did not directly target Bitcoin (BTC), this measure appears to have established the standard for a decade of anti-“cryptocurrency” policies.
China “banned” Bitcoin in 2013
- 2. In 2013, the People’s Bank of China (PBoC) banned Chinese financial institutions from processing Bitcoin transactions and described “cryptocurrency” as meaningless. As a result of the announcement, the price of Bitcoin fell below $1,000 at a time when BTC China, also known as BTCC, was the largest Bitcoin exchange in terms of volume. Within a short period of time, the asset was back to its previous state.
Fake “bans” and threats against Bitcoin by China in 2014
- 3. An article purporting to be news that was published on the website Sina Weibo in March stated that the People’s Bank of China intended to put an end to all Bitcoin transactions in the nation within a period of less than one month. Despite the fact that the claim was shown to be false, it did not prevent the price of Bitcoin from plummeting.
- 4. Around the same time, the exchange FXBTC, which is based in China, said that it would be closing its doors in response to threats from regulators to outlaw exchanges. The price of Bitcoin dropped from $709 to as low as $346, and it’s possible that both of these instances played a role in the decline. Even though it was a violent market, the price began to rebound quickly and was back above $600 by the end of May.
In 2016, China exchange hack tanks Bitcoin
- 5. Even though it is not directly controlled by China, the prominent cryptocurrency exchange Bitfinex that is situated in Hong Kong was the target of one of the most significant cyberattacks in August of 2016. A total of about 119,756 Bitcoins were taken by the attackers, and the whereabouts of which were unknown until recently, and how could we forget.
- It is believed that the revelation of the large exchange breach was responsible for causing a decline in the price of Bitcoin of more than 10% over the course of two days. By September, the prices had already returned to where they were before the hack.
2017-Two bans, One month
- 6-7: The People’s Bank of China (PBoC) announced in September that Chinese citizens would not be permitted to participate in funding initial coin offerings (ICOs). This came shortly after the Chinese government issued an official ban prohibiting cryptocurrency exchanges from providing services to users located within the country. It took Bitcoin around three months to go from prices in the $4,000 range to an all-time high of approximately $20,000 at the time.
- 8-9: When BTCC said it was closing down under the government’s “ban,” and the PBoC deputy governor claimed that “Bitcoin’s body” will float down the river one day, the Bitcoin was on its way towards one of its largest bull runs ever. At this moment, the market was already well on its path to recovery and only encountered modest drops.
2018-Fake News leads to crisis
- 10. In January 2018, there were rumors circulating that Chinese citizens may have been responsible for a drop in the value of “cryptocurrencies”.
- 11. Many hypothesized that the decline was because to allegations in Chinese media that stated the government of China was cracking down on mining. Midway through the month of February, the price of a Bitcoin had fallen by more than 65%, reaching $6,852. However, this only lasted for a short period of time, and by the end of the month, the price had increased to more than $11,000.
2019 China FUD
- 12. A draft document from China’s National Development and Reform Commission indicated in April 2019 that the government body was contemplating prohibiting “cryptocurrency” mining in the nation… again. This caused the price of Bitcoin to see a minor decrease.
- 13. After taking this action, the PBoC then made the announcement that trading will be “disposed of immediately” upon the subsequent discovery. In spite of a momentary drop in price, fresh all-time highs weren’t too far away.
China Behind Bloodbath of 2020
- 14. The “crypto massacre” that occurred in March 2020, which was characterized by a precipitous drop in the price of practically all major tokens at the start of the COVID-19 outbreak, is widely thought to have been triggered in large part by Chinese miners selling off their holdings.
- 15. As part of its campaign to combat money laundering, the government of Hong Kong declared in November 2020, intentions to prohibit retail “crypto” trading. The first year of COVID came to a close with Bitcoin reaching an all-time high of more over $30,000 before the year 2020 came to a close. This was the first time in three years that Bitcoin had broken the $20,000 barrier.
Modern Day China Fud
- 16. In May 2021, the National Internet Finance Association of China, the China Banking Association, and the China Payment and Clearing Association published a statement that warned against investing in Bitcoin due to the possible hazards.
- 17. The next month after that, the PBoC issued an order mandating that Chinese banks and mobile payment service providers stop providing banking and settlement services to customers who were engaged in Bitcoin-related activities.
- 18. Then, in June, the government declared a real ban on mining, which is what started the enormous migration of miners out of the nation.
- 19. In September of 2021, the People’s Bank of China (PBoC) has once again announced that any and all transactions using cryptocurrencies in China are unlawful.
The total number of times that China-related fear, uncertainty, and doubt (FUD) has failed to destroy Bitcoin: 19
What have you done for me recently? Well a Shanghai Court has Declared Bitcoin Legal Property, Probably Nothing
The Shanghai High People’s Court has said that Bitcoin is a legal, virtual property that has economic value and is subject to property rights. This determination was made by the court.
The ruling was made in the context of a lawsuit case that was filed in October 2020 in the Shanghai Baoshan District People’s Court.
The plaintiff, Cheng Mou, demanded that the defendant, Shi Moumou, return the 1 BTC that the defendant had borrowed from the plaintiff. Shi Moumou had borrowed the bitcoin from Cheng Mou.
The plaintiff was awarded victory by the court in Shanghai, and the defendant was ordered to return the Bitcoin; however, the defendant did not comply with this decision.
The matter was brought back before the judge, and then a mediation took place. It was discovered that the defendant no longer possessed the Bitcoin; consequently, an agreement was reached between the two parties that the plaintiff would be compensated at a discount from the value of the Bitcoin at the time of the loan.
This decision makes it very evident that Bitcoin possesses value, scarcity, and the capacity to be disposed of; hence, it satisfies the concept of virtual property and is therefore subject to property rights.