China is known around the world for its unusual viewpoints in many different areas, including cryptocurrency. The country has been unfriendly towards crypto on numerous occasions, and its stance is not likely to change soon. According to recent reports, the country might soon make its next move against the crypto industry by banning Bitcoin mining.
According to China’s top economic planner, the National Development Reform Commission, the country should eliminate the mining business completely. The Commission recommended this course of action once before, back in 2011. Even back then, China was the dominant region in terms of BTC mining due to large amounts of cheap electricity that came from hydropower and coal.
Further, it has a well-established manufacturing base, which was more than capable of supplying the mining equipment with all the electricity it needed.
Despite this, the Commission once again asks that China bans mining and eliminates it. However, as established earlier, this is hardly a surprise. The country made moves against the crypto industry in the past as well, through bans on ICOs and crackdowns on various exchanges. Since the miners are the only ones left right now, it was logical to assume that they will be next.
While many of them wanted to prolong their operations in China for as long as possible, the miners were hardly surprised by this development. In fact, they expected it even as far back as in 2017, which is why many of them came up with backup plans. That way, if Chinese mines end up shut down, new ones can be opened elsewhere, and the mining companies will manage to pull through.
Those who cannot afford to relocate will be eliminated, which is good news for those who can continue their business elsewhere, as it will eliminate competition.
Why might China’s ban on Bitcoin mining be a good thing?
It might sound contradictory, but China’s move against Bitcoin mining might actually be a good thing for the crypto industry.
The first thing to consider is the issue of centralization and decentralization. Bitcoin was designed to be completely decentralized, and that includes all of its aspects. However, the mining system is a clear weakness, particularly after most mining companies went to China due to cheap energy and loose regulations back when they first started arriving.
Over the years, more and more miners started arriving, and these days as much as three-quarters of all computing power devoted to Bitcoin mining comes from China. It is shared by a handful of companies, and it comes from the same area of the world, which is an unwanted centralizing element in a system that should be fully decentralized.
Introducing a ban on mining and forcing these miners to spread across the world might be just what the industry needs.
Next, China is also known for its obsession with control. It fully controls its internet, and it also seeks to obtain a greater amount of control over the crypto and blockchain industries. Banning mining is expected to allow them that. However, if the country does ban mining, it might actually make Bitcoin more global, as well as more resilient to control than ever.
In other words, the ban on Bitcoin mining in China might be the push that the industry needs. Miners will find a way to continue their business elsewhere, while the industry might actually grow stronger than ever.