US Authorities Uncover Chinese-linked Bitcoin Mining Operations

The discovery of numerous Bitcoin mining operations with ties to China on American soil has flagged serious national security concerns among US authorities. A comprehensive report published by The New York Times on October 13 unveils a substantial presence of Bitcoin data centres in the US, traceable back to the Chinese government. The proximity of some of these operations to critical military and infrastructure sites further exacerbates the apprehensions. A notable case is a mining operation in Wyoming, situated adjacent to a Microsoft data center, pivotal in supporting various Department of Defence initiatives.

Geopolitical Undercurrents

The exploration sheds light on the potential risks emerging from growing Chinese-linked mining operations amidst the escalating political discord between the United States and China. The latter’s decision to outlaw mining activities in 2021 propelled many mining entities to migrate to crypto-receptive US states like Texas and Wyoming. The broader geopolitical implications are palpable as these revelations come at a time of heightened tension between the two superpowers, with the US continually scrutinizing cryptocurrency usage by individuals and corporations affiliated with China. Moreover, six Congress members called for a thorough investigation in July, following allegations of the cryptocurrency startup Prometheum having connections to the Chinese government.

Power Grid and Infrastructure Stress

The infrastructural stress induced by these mining operations is significant. The collective energy consumption of Chinese-owned or operated Bitcoin mining facilities across at least twelve states equates to that of 1.5 million households, posing a considerable demand on the US power grid. These mining facilities, harboring specialized computers operating ceaselessly, have the potential for targeted blackouts and cyberattacks due to their substantial energy usage and the instantaneous capability to escalate or cease operations, presenting a unique challenge among large power users.

Ownership and Equipment Supply

A commonality among these mining operations is the utilization of computing equipment produced by Bitmain, a Chinese enterprise. Following China’s ban on Bitcoin mining in May 2021, there has been a noticeable uptick in equipment shipments from Bitmain to the US. The ownership structures of these mining ventures range from transparent investments by affluent Chinese nationals seeking revenue channels outside China’s jurisdiction, to more murky setups with several traceable back to the Chinese government.

The revelation of Chinese-linked Bitcoin mining operations dispersed across the US, intertwined with substantial energy consumption and potential national security threats, has garnered the attention of both US government officials and corporations. The unfolding scenario evokes pressing inquiries concerning cybersecurity, energy sustainability, and the ongoing geopolitical strain between the US and China.

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Bitmain Commits $54 Million Investment in Core Scientific, Inc. Amid New Supply Contract

At the World Digital Mining Summit, Core Scientific, Inc. (OTC: CORZQ), a North American leader in blockchain computing data centers and software solutions, disclosed a significant investment from Bitmain, the globally recognized manufacturer of digital currency mining servers. Bitmain’s commitment amounts to $53.9 million, further cementing the bond between the two industry giants.

This collaboration will see Bitmain furnishing Core Scientific with 27,000 of its latest Bitmain S19J XP 151 TH bitcoin mining servers. The transaction involves a $23.1 million cash payment and an equity exchange worth $53.9 million in Core Scientific common stock. The equity’s per-share value will be finalized following a chapter 11 plan of reorganization, anticipated to gain approval in the upcoming fourth quarter.

Max Hua, Bitmain’s CEO, expressed his optimism about the strengthened ties with Core Scientific, praising their “professionalism, integrity, and commitment” to the Bitcoin Network’s growth. He emphasized the shared vision of both companies in fostering the expansion of the Bitcoin Network, especially as global bitcoin adoption surges.

Core Scientific’s history with Bitmain is deep-rooted. Since its inception in 2017, Core Scientific has managed over 600,000 Bitmain miners across its data centers. Presently, a staggering 99% of the 200,000 miners they operate, both owned and hosted, are Bitmain S19 models. Bitmain has also been a loyal hosting customer for nearly half a decade, entrusting Core Scientific with a significant portion of its mining equipment.

Adam Sullivan, CEO of Core Scientific, acknowledged the pivotal role Bitmain plays in their operations, stating, “Bitmain’s product quality, attention to service, and responsiveness are critical to our success.” He further highlighted the anticipated efficiency boost the new miners would bring, especially in light of the upcoming halving event.

By the close of 2023’s fourth quarter, Core Scientific aims to integrate and activate the 27,000 units, potentially adding 4.1 exahashes to its self-mining hash rate. Additionally, both parties have consented to upgrade older Bitmain miners at Core Scientific’s facilities to the newer S19J XP models, promising an even greater hash rate increment.

As of the end of August 2023, Core Scientific boasted an impressive energized hash rate of 22.0 exahashes per second, spread across its data centers in five U.S. states. Their self-mining operations yielded 965 bitcoins in August alone, with a cumulative 9,755 bitcoins mined year-to-date, surpassing any other publicly listed bitcoin miner in North America.

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CleanSpark Buys 20000 New Bitcoin Miners to Boost

CleanSpark, a Bitcoin miner, is expanding its mining capacity in the United States by purchasing 20,000 additional Antminer S19j Pro+ machines for a total cost of $43.6 million. It is anticipated that the acquisition would increase the processing capacity of the firm by 37%. Additionally, the transaction will bring the total number of miners acquired during the bear market up to 46,500 units.

After applying coupons for a discount of 25%, CleanSpark will pay $32.3 million for the machines. This comes out to a total price per terahash (TH) of around $13.25, as stated in a statement released on February 16th. It is anticipated that the Pro+ rigs would be delivered in batches between the months of March and May, and they are 22% more productive than their prior versions.

The firm is increasing its mining capacity by taking advantage of the market’s decreasing rig pricing in order to do so while the price of Bitcoin (BTC) is on the rise. According to information provided by Hashrate Index, the price per TH of ASICs with the same Bitcoin mining effectiveness is presently at $15.09, which is a significant drop from the price of $90.72 that was witnessed one year ago. In comparison to other computers of the same ASIC generation, the Antminer S19j Pro+ model, according to CleanSpark, provides a higher return on investment.

According to the business, “Once they are fully operational, it is projected that they will add 2.44 EH/s to CleanSpark’s current 6.6 EH/s of bitcoin mining processing capacity (for a total of 9 EH/s),” which would represent an increase of 37%.

CleanSpark asserts that the acquired models continue to be more appealing to its operations in the present market circumstances and that this trend will likely continue in the foreseeable future. “The S19j Pro+ delivers 122 terahashes per machine and saves an average of 2 joules of energy per terahash when compared to the S19j Pro model of the same generation,” the company said, adding that a total of 15,000 of the new machines will be shipped to the company’s locations in the city of Washington, Georgia. It was announced in January by CleanSpark that the site will be receiving an extension costing $16 million. This expansion is expected to result in an increase in the hash rate of 2.2 exahashes per second (EH/s), bringing the overall hash rate to as high as 8.7 EH/s. Before moving into the premises that was previously occupied by Mawson Infrastructure Group in Sandersville, the firm bought the building in August of the previous year.

According to a research conducted by Hashrate Index, publicly traded mining businesses had an increase in their mining output as well as their hash rates in January, after a challenging year in 2022 that was marked by falling Bitcoin prices and rising power costs. The amount of Bitcoin that was mined by CleanSpark throughout the month increased by a whopping 50 percent, hitting a new monthly production high of 697 BTC. Since December, when it was 6.2 EH/s, its hash rate has increased to 6.6 EH/s.

Other public mining companies, such as Core Scientific, Riot, Marathon, and Cipher, have seen significant increases in Bitcoin production over the course of the past month. This was made possible by consistent increases in the cost of electricity in the United States as well as improved weather conditions.

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Core Scientific seeks to sell $6.6 million in Bitmain coupons

According to the records submitted with the court, on January 25 the defunct Bitcoin (BTC) mining business Core Scientific filed an emergency application in which they asked authorization to sell Bitmain vouchers with a value of $6.6 million. The vouchers were purchased from Core Scientific.

According to the petition, the coupons have been encumbered by a variety of limitations, which make them pointless for the purposes of Core Scientific’s activities. To be more exact, the coupons may be used to pay for “just” 30% of any new order of S19 Miners placed with Bitmain; nevertheless, they cannot be redeemed for cash through Bitmain.

The coupons can only be used for Bitmain S19 models, which have a lower hash rate output in comparison to Bitmain’s more recent models. “Even with the availability of the Bitmain Coupons, the Debtors do not believe that utilising their liquidity to purchase new S19 Miners is the best use of the Debtors’ cash,” the company claimed. “This is because the Debtors do not believe that using their liquidity to purchase new S19 Miners is the best use of the Debtors’ cash.” “The Debtors do not feel that using their liquidity to acquire additional S19 Miners is the best use of the Debtors’ funds,” which is short for “liquidity.”

In addition, the Bitmain coupons will no longer be valid between March and April of 2023, which is around the time when the company anticipates that it will have emerged from its Chapter 11 bankruptcy reorganisation. In addition, Core Scientific has said that the company has no plans to acquire any additional S19 miners either during or after the duration of Chapter 11.

In addition to the motion, the company has been in conversation with Bitmain and two potential third parties interested in acquiring the vouchers at a significant price reduction. The individual sales of Bitmain coupons totalling $1.9 million for $285,000 and the sale of coupons totaling $4.8 million for roughly $713,000 each indicate about 15% of the face value of the coupons that were sold.

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Bitcoin Miner CleanSparks Buys 10,000 Miners at Discounted Price

CleanSpark, an American Nasdaq-listed cryptocurrency mining company, has announced the purchase of new 10,000 Antminer S19j Pro units for $28 million.

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The purchase agreement was made with Cryptech Solutions which will deliver the new miners to CleanSpark’s facilities by late October or early November of this year.

According to CleanSpark, the current downturn in the digital currency ecosystem, and its unique economic and business strides were instrumental in helping it land the new miners at a very discounted price. According to the firm, Bitmain, the tech giant that manufactures the Antiminers placed the items on sale at $119 per TH/s earlier this year. However, with the market downturn, CleanSpark said it landed the units at $28 per TH/s.

 

“During the tail end of the bull market last year, we strategically focused on building infrastructure instead of following the then industry trend of pre-ordering equipment months in advance,” said Zach Bradford, CEO of CleanSpark. “This strategy positioned us to make purchases of landed rigs at significantly lower prices, thus reducing the time between deploying capital and hashing, accelerating our return on investment.”

 

With this coming off as the second acquisition in two months, the company’s Executive Chairman, Matt Schultz said the company landed the extremely discounted deal because it prepared for the tough times well ahead. “We’ve strategically avoided lengthy delays in receiving machines and energizing circuits, quickly adding long-term value to our stakeholders,” he said. 

 

At the moment, CleanSpark said it has as much as 40,000 crypto mining equipment in its fold and boasts of a hashrate of 3.8 EH/s. The company churns out 14.9 bitcoins per day from its operations and revealed it strives to maintain its spot as one of the top mining outfits in the cryptocurrency industry.

 

Other Bitcoin mining firms have not had it as good as CleanSpark as many have had to sell some of their mined Bitcoin assets in other to offset debts and handle the cost of operations.

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Intel To Present Low Voltage, Energy Efficient Bitcoin Mining Chip At Conference

This could be huge. Intel plans to enter the Bitcoin mining space with a cleverly marketed “ultra-low-voltage energy-efficient” ASIC chip. Considering that the chip shortage severely delayed the next generation of ASIC miners, this is tremendous. And, more importantly, it opens up the door for Bitcoin miners manufacturing in the USA. And in the rest of the Western world, even. 

Related Reading | Why Did China Ban Bitcoin Mining? Here Are The Seven Leading Theories

In December, Raja Koduri hinted at Intel’s intention to get into the Bitcoin mining space. Even though he’s the chief architect and senior vice president of Intel’s architecture, graphics and software division, no one expected Intel to deliver so soon. Details are scarce. There’s nothing on Intel’s official site. A quick search reveals that “Access to additional search results for “bonanza” is restricted.”

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However, we have the 411 on the project that goes by the code name “Bonanza Mine.”

What Do We Know About Intel ’s “Bonanza Mine”?

The product will be an “ultra-low-voltage energy-efficient Bitcoin mining ASIC.” According to Tom’s Hardware, the page that broke the news, Intel will reveal their new chip at:

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“The ISSCC conference is a yearly gathering of the best and brightest minds in the chip industry. This year, Intel has a presentation scheduled in the ‘Highlighted Chip Releases’ category to outline a new “Bonanza Mine” processor, a new chip described as an “ultra-low-voltage energy-efficient Bitcoin mining ASIC.”

Apparently, Intel has been developing the product since at least 2018, when they registered “a patent for a specialized processing system that uses an optimized SHA-256 datapath.”According to Tom’s Hardware, “Intel has a wealth of experience in hardware-assisted SHA-256 algorithms due to the use of these instructions in its CPU products.” 

A more recent indication of the company’s intentions came when the already mentioned Intel executive Raja Koduri “appeared on popular streamer Dr. Lupo’s show.” He told him point-blank”

“Being able to do much more efficient blockchain validation at a much lower cost, much lower power, is a pretty solvable problem. And you know, we are working on that, and at some point in time, hopefully not too far into the future, we will kinda share some interesting hardware for that.”

BTCUSD price chart for 01/18/2021 - TradingView

BTC price chart for 01/18/2022 on Bitstamp | Source: BTC/USD on TradingView.com

Why Is This Development Important?

Until now, ASIC Bitcoin miners manufacturing is controlled by Bitmain and Microbt, with Canaan, Strongu, and Ebang handling a minority of the market. All of those companies are Chinese. The chips are all made in Taiwan and South Corea. This poses a centralization problem for the Bitcoin network that seemed unsolvable until Intel’s soft announcement.

Now, the open-source Bitcoin miner that Jack Dorsey’s Block is working on makes a lot more sense. Theoretically, the silicon chip is the only part of an ASIC machine that can’t be bought in a hardware store. With that problem solved, by no less than an industry leader with immense manufacturing power, the sky’s the limit. If this whole thing materializes, expect a huge leap forward in the further decentralization of Bitcoin mining. 

Also, Intel’s announcement certainly legitimizes Bitcoin mining as a business to watch for the next 100 years. As podcaster Anthony Pompliano said, “Bitcoin is a computer network. Every technology company will eventually plug themselves into it.” With this announcement, Bitcoin not only gets Intel’s seal of approval. The giant company has now skin in the game. 

Related Reading | Intel, Microsoft Took 10+ Years to See Gains, Crypto Investors in Good Position

To close this off, let’s quote Tom’s Hardware one more time:

“For now, it isn’t clear if Intel will release the Bonanza Mine chip as a product for the public or if it remains confined to a research project. However, given that the chip is in the “highlighted Chip Releases: Digital/ML” track and Koduri’s comments, it’s logical to expect that these chips will be offered to customers in the near future.”

So, everything we said is not a done deal just yet. It smells good, though.

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U.S. Mining Company Marathon Now Holds 8,133 BTC. And They’re Not Selling It

In their December report, Marathon Digital Holdings announced their total BTC holdings. And assured their investors that they were not selling any of it any time soon. This is particularly interesting considering the company bought “a record number” of S19s in December. Reportedly, they got a giant loan using Bitcoin as collateral. An operation we’ll see a lot more in the near future throughout the industry. 

The report quotes Fred Thiel, Marathon’s CEO, in a celebratory mode. “2021 was a transformative year for Marathon as we increased our hash rate 1,790% and increased our bitcoin production 846% year-over-year to 3,197 self-mined BTC.” Staggering numbers that show the size of the Bitcoin mining business.

https://twitter.com/WhatBitcoinDid/status/1478354274656657427

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As for their plans, the report says:

“The Company last sold bitcoin on October 21, 2020, and since then, has been accumulating or “hodling” all bitcoin generated. As a result, Marathon currently holds approximately 8,133 BTC, including the 4,813 BTC the Company purchased in January 2021 for an average price of $31,168 per BTC.”

Of course, they’re not alone. NewsBTC documented the trend throughout the whole year. 

Most Miners Are Holding Strong

One of the first persons to spot the trend was Lex Moskovski. In February, the analyst reported on “the first day since Dec, 27 when Miners Position change turned positive.” 

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https://twitter.com/mskvsk/status/1365557599358320642

Approximately four months ago, NewsBTC used data to find a possible explanation:

“Data shows that miner profitability has dropped in comparison to the last time that bitcoin was at this price. The profitability for bitcoin back in April at $50K had been 40% higher than it is right now when bitcoin hit $50K again. This means that miner profitability is hitting the lows at all-time highs.

This drop in profitability has seen miners refusing to sell the BTC they are rewarded with for mining blocks. Instead choosing to hold these coins in wait for much higher prices.”

Miner profitability might be decreasing, but, the business is still a long way from turning red. Especially for a giant operation like Marathon. In a recent interview that NewsBTC reported on, Fred Thiel said.

“Thiel expressed that, factoring operational mining costs (energy plus hosting), Bitcoin’s breakeven rate is roughly $6,500, meaning that the digital coin would need to drop at least 80% for Marathon to face challenging difficulties.”

Less than three months ago, NewsBTC reported on another set of data that showed the same phenomenon:

“As pointed out by a CryptoQuant post, BTC miner reserves continue to trend sideways amid the coin’s strong move up. The “miner reserve” is a indicator that shows the total amount of Bitcoin that miners are currently holding in their wallets. An increase in the metric’s value suggests miners think the coin’s value will go up in the near future, hence they are stocking up on it.”

BTCUSD price chart for 01/05/2021 - TradingView

BTC price chart for 01/05/2021 on FX | Source: BTC/USD on TradingView.com

The Marathon Mining Company’s Future

The company’s recent billion-dollar investment is a play for the future. Especially considering just when those machines will arrive.

“On December 23, 2021, Marathon announced that it had entered into a contract with BITMAIN to purchase a record number of ANTMINER S19 XP (140 TH/s) bitcoin miners, all of which are currently expected to ship from BITMAIN between July 2022 and December 2022.”

The chip shortage is real, people. If an order this size can only be fulfilled in six to twelve months, something’s up. Also, by the looks of it, the ASIC manufacturing business might be even more profitable than Bitcoin mining.

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Thailand Sees PoW Mining Surge As China Ban Lingers On

As the popular proverb saying goes, one man’s food is another man’s poison, the same can be said of crypto mining which is largely on the rise in Thailand amidst the persistent ban on related activities in China.

According to an exclusive report by Al Jazeera, small entrepreneurs in Thailand, and neighbouring countries are taking advantage of the crash in the price of mining machines to fuel the interests of local miners in the region.

Citing a local Thai entrepreneur, Pongsakorn Tongtaveenan, the Chinese ban caused the price of mining machine, Bitmain’s Antminer SJ19 Pro, to plunge by almost 30 percent. This slump not only just created a business opportunity for Pongsakorn, but it also notably afforded many local operators to get their hands on the machines at a relative discount.

Getting a hold of Bitmain’s Antimers, the most popular mining gear for Proof-of-Work (PoW) is typically very tough, going by the competition that breeds demand that far outstripped supply. Big multinationals are more likely to get their hands on the miners going by the large quantities of orders they place, and despite this, delivery also literally takes a lot of time.

The ban on mining activities created an equal footing for Thai miners who according to the Al Jazeera report now numbers more than a hundred thousand. The profitability of the PoW mining venture is very evident as each running miner, according to Pongsakorn returns as much as $30-$40 on a daily basis.

One Thailand-based miner who set up a solar-powered mining rig worth $30,000 told Al Jazeera that he broke even within three months of operating the rig. Just as crypto mining surged in Thailand, large-scale mining corporations operating from the United States are also shoring up their influence in the mining game, a scenario that is shifting the global mining hash rate to the US in place of China.

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Why Did China Ban Bitcoin Mining? Here Are The Seven Leading Theories

One of 2021’s biggest stories was the China ban on Bitcoin mining. On one hand, the news affected Bitcoin’s price and gave ammunition to the nay-sayers that think that governments will outlaw Bitcoin. On the other, the network kept working without a hiccup, recovered its hashrate in record time, and gained in decentralization. However, a question remained. Why did China exclude itself from this very lucrative activity in which they were dominating?

As Bitcoin entrepreneur John Carvalho not-so-eloquently put it, “I refuse to believe that China is stupid.” There has to be a reason, even if it’s a simple one. To help our audience solve the puzzle, NewsBTC decided to gather all of our theories in a single post.

China Ban Theory #1:  The Digital Yuan CBDC

This one is as straightforward as it gets. When China started cracking down on miners, NewsBTC reported: “As for the possible reasons, Bitcoin Magazine’s Lucas Nuzzi cites the upcoming Digital Yuan CBDC.” And Nuzzi said, “They’re literally rolling out their own coin (a CBDC) that will enable the mass surveillance and unbanking of dissidents.”

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So, did China kill a potential billion-dollar industry just to squash their CBDC’s competition? Is that it?

China Ban Theory #2:  Blackouts

Is China having energy issues? In that same article, we posed another theory:

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“In retrospect, we should’ve seen it coming. Only two months ago, following a suspicious blackout, NewsBTC reported:

According to the Beijing Economic and Information Bureau, there were concerns about the energy consumption related to these activities. PengPai quotes Yu Jianing, rotating Chairman of the Blockchain Special Committee of China, to claim that the country’s environmental requirements could lead to crypto mining being more “strictly regulated”. Jianing said this will be “inevitable.”

However, would they be decommissioning small hydropower stations if this was the case?

China Ban Theory #3:  Cleaner Energy Sources

Our report on small hydropower stations’ source was government-regulated media, so take it with a grain of salt. It starts with a claim that clashes heavily with theory #2:

“According to the article, the heyday of private power plants in China was the beginning of the century. Investors built thousands of hydropower stations because they saw them as a constant cash cow. For their part, the regions nearby saw them as a sign of progress and a solution to their energy problems. 

However, with the gradual surplus of electricity in China in recent years, the electricity generated by hydropower stations is often destined to being abandoned (commonly known as “abandonment of electricity”)”

However, the main reason for the decommissioning seemed to be repairing the original flow of the rivers. “Hydropower stations have always been one of the important factors restricting the ecology of Sichuan’s rivers,” said Wang Hua, deputy director of the Sichuan Provincial Water Resources Department. We went a step further:

“It’s possible that the government is trying to get rid of those plants. That would explain the article’s tone, it seems like it was trying to get investors to stay away from those hydropower stations. In light of this, China’s ban on Bitcoin mining could just be part of an even bigger play. They’re serious and methodically shaking things up over there. 

What could be their end-game? Is China just trying to go carbon neutral and repair the original flow of the rivers? Or is there something else at play here?”

However, something doesn’t add up. In another article about the ban, we highlighted that hydropower energy is clean energy.

“Did China make the mistake of a lifetime by banning Bitcoin mining or do they have a secret plan?

The fact that the electricity for crypto mining in Sichuan came from clean hydropower meant that many thought the province would be a safe haven for Bitcoin miners.”

China Ban Theory #4:  The New China Model

We explored Bloomberg’s theory about a “less founder-driven and more China-centric” model that China was supposedly exploring.

“If China is abandoning the Silicon Valley model, what will it replace it with? Insiders suggest it will be less founder-driven and more China-centric.

Why is China dwarfing its biggest industries and players? Is the “China Model” just concerned with scale? Or is control their focus? Are they cracking down on people and companies with too much power that work on a global scale?”

And even though it wasn’t quite believable, it introduced the concept that China was also cracking down on their biggest tech executives. Maybe this isn’t only about Bitcoin?

BTCUSD price chart for 01/02/2022 - TradingView

BTC price chart on Bitbay | Source: BTC/USD on TradingView.com

China Ban Theory #5:  Making Bitcoin Hard To Use

This one doesn’t explain the overarching theme of the China ban. It does add color to whatever theory you prefer. In an event, Yin Youping, Deputy Director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China, said, “We remind the people once again that virtual currencies such as Bitcoin are not legal tender and have no actual value support.” And proceeded to list everything the PBOC was doing to combat cryptocurrency trading.

In the NewsBTC report about it, we said:

“Maybe their plan is simpler than we thought. It’s possible that The People’s Bank of China is just going to make it really really hard for the common citizen to access Bitcoin. And, China’ll use propaganda and repetition to keep people in check and scared of the unknown. One of Bitcoin’s prototipical adversarial scenarios. A battle that Bitcoin expected sooner or later.”

China Ban Theory #6: Preparing For Evergrande’s Default

Was the Chinese government just closing the exits? They knew that the Evergrande situation was inevitable and didn’t want people to have the Bitcoin lifeboat available. In our report, we said:

“To recap: the government saw this coming from a distance. They knew the crisis was going to repeatedly hit the country and banned Bitcoin mining to scare the population into not buying the hardest asset ever created. Bitcoin, the true hedge against the collapse of every economy.”

China Ban Theory #7: FUD To Get More Bitcoin

According to John Carvalho’s wild and full of assumptions theory, China bans something related to Bitcoin every cycle to manipulate the price and get more BTC. The country has no incentive to ban the industry. They make too much money mining, plus they control the ASICs manufacturers, plus mining machines inflate the value of chips, and they control that business too. So, Carvalho’s theory is:

“The main ASIC manufacturer, the Chinese company Bitmain, had a new generation of miners ready. So, the CCP “decided to create a demand for the aftermaket and combine it with the FUD.” As they usually do, they sold their Bitcoin and made their shorts. Then, China banned Bitcoin mining and the whole country turned off the ASICs. The world perceived the ban as real, just “look at the hashrate.” This is the first time this happens. Then, China sold a small portion of its ASICs to the USA.”

According to him, Bitcoin mining in China didn’t stop, they’re just not signing the blocks. Of course, he doesn’t have any proof, and neither do we. This is just a theory, like all the others.

What’s really going on in China? What’s the reason behind the great China ban of 2021? We wouldn’t know for sure, but we have many suspicions. Let’s hope 2022 gives us solid evidence, new insights, or, at least, a plausible explanation.

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