In the past 7 years China has banned Bitcoin and other cryptocurrencies several times. Most of the time the market reacted heavily, but recovered later not necessarily because a ban was lifted, but the bad news simply dissolved.
Why is China banning Bitcoin and this time specifically Bitcoin mining? And how do you even ban the same thing more than one time? In today’s article we are going to take a closer look at recent events and why they are not bad at all.
China bans Bitcoin. Again.
That China has banned Bitcoin several times stems from the simple fact that the headline is a seller. In the past couple of years most approaches by the government and regulators weren’t always meant to ban something in general, but to get a better grip on the market and which companies are allowed participating.
Most of the time Chinese officials were simply trying to regulate illicit activities, but western media simply felt that it is time to make a big deal out of it. In fact, most of the mining and crypto industry went unregulated for a long time.
Therefore, many members of the Bitcoin community simply called out those articles in question as FUD. But it is not always FUD, because in rare cases the Chinese government is banning something or to be more specific certain businesses.
Miners will move on
Bitcoin mining consumes a lot of energy and it seems that government officials are concerned that this energy will be needed to power other industries. According to several reports 26 mining facilities had to shut down in the region of Sichuan. But this is not bad news at all, because it proves two important things.
Many critics pointed out in the past that Bitcoin is centralized due to the fact that most of the miners powering the network are situated in China. Now that at least some miners have to leave it shows that the network is still healthy, thus the critics were wrong.
The second lesson that can be learned is that miners will move to different countries and are looking for suitable regions. It is a sustainable business and will have a future. This underlines the fact that Bitcoin cannot be stopped by any government in the world and will continue to function due to its strong incentive structure.