The crypto community and press around the world were surprised and shocked when the news broke that the Chinese government was set to ban cryptocurrency mining in the nation.
This may have not been too serious a matter, were it not for the fact that China is without a doubt the home of the crypto/bitcoin mining industry. Around 70% of miners are from the country and the biggest mining company, Bitmain, heralds from China. Mining is so popular even university students are taking part.
The decision by the government seems strange. Bitmain is a company valued at over $10 billion with the smaller miners in China earning plentiful sums too. The business is popular, cryptocurrencies are also on the rise and most importantly the industry is making money and with it bringing taxes. So what would prompt China to ban a billion dollar industry?
The Environmental Issue
The official line from the National Development Reform Commission, China’s top economic planning body, which set out the report recommending the banning of cryptocurrency mining, said that the industry:
“lacked safe production conditions, seriously wasted resources, polluted the environment,”
Now, in defense of this line of argument, the mining process does burn lots of electricity and is harmful to the planet. Many articles and discussions have been had with regards to the ethical implications of crypto mining and the issue has been a regular point raised in defiance against the industry as a whole.
Government wants control
However, others have seen this argument to merely be a ruse and a way to deflect away from the Chinese government’s true intentions. Forbes magazine recently published an article suggesting that “This move has much more to do with control”. The Communist party is supposedly worried about the long term implications of a decentralized economy and an industry they would struggle to regulate.
Not only that, but the government is actually seeing the possibilities blockchain technology can do and is scrambling to find a new alternative to provide for citizens, with the Bank of China set to create their own cryptocurrency under government regulations.
Do you think China was thinking of the environment or control? Whatever the case may be, the issue does not look good for the miners of China. Many people are now speculating as to where the new home of crypto mining will be should the proposed ban come to fruition. Will we see a new Asian power or will the US be the new hotbed?