Bitcoin Forum

Posting this here instead of the press subforum for more awareness. I shall be following this closely and post more updates.

This is certainly another issue that might become more concerning. How the miners in China wish their electricity bills can be paid in bitcoin hehe.

https://bitcoinexchangeguide.com/wp-content/uploads/2019/04/Chinese-Bitcoin-Miners-Face-Difficulties-After-They-Went-To-Iran-Looking-For-Cheap-Energy.jpg

As Chinese authorities make it harder than ever to exchange cryptocurrency into fiat, miners may be forced to move to other jurisdictions, local sources say.

On Monday, crypto industry blogger Colin Wu tweeted that miners in China have been struggling to pay for electricity after the authorities started cracking down on over-the-counter (OTC) brokers in the country.

The tweet notes that “74% of the miners surveyed told Wu that the payment of electricity bills has been greatly affected.”

It’s currently a “challenge” for Chinese miners to convert bitcoin (BTC, +6.10%) or tether (USDT, -0.08%) into yuan because “many people have had their bank accounts frozen when exchanging crypto for [renminbi] on OTC platforms,” said Thomas Heller, formerly global business director at the mining pool F2Pool and now chief operation officer of mining and media firm HASHR8.

In the meantime, some operators are unplugging their miners, Wu wrote in a blog post. “There are also miners who said that their mining machines have been shut down for a month because they cannot sell the cryptocurrency to pay the electricity bill.”

Some OTC companies that specialize on serving mining firms “have also terminated their business,” Wu wrote.

Read in full https://www.coindesk.com/chinese-miners-struggle-to-pay-for-electricity

Does it really matter on whatever is happening in China? It is a country with an authoritarian leadership who are constantly violating the human rights of Uyghurs Muslims and the people of Tibet. Constantly violating the borders of their neighbors and trying to take over small nations like Pakistan and Sri Lanka by giving them loans with exorbitant interest rate that they will never be able to repay!

In 21st century, Chinese people have their own version of Google and Facebook and even Windows operating system! They are soon going to get their own version of government controlled bitcoin. So why do they need bitcoin at the first place? The faster these Chinese miners leave the crypto market, the better! Because in future, the Chinese government will eventually close down all mining firms born and grown on Chinese soil.

There is nothing strange in this news, if cryptocurrency trading has been banned in China for years, then OTC trading is not exempt from that either. For some reason, the Chinese authorities have only now decided to deal with such a way of selling BTC, thus making it clear to the miners that they are no longer desirable in the country.

I can agree with avikz that this may not be so bad, because there is a perception that there is too much Chinese influence on BTC mining anyway, and that we need more decentralization on that issue. Therefore, it is better for this to happen gradually than for some ban to happen overnight, which has always been an option - because there is no broad and lengthy debate under communism - they make decisions quickly and implement them even faster.

I think this problem might be exaggerated, with such bitcoin bull rally there is big demand and I'm pretty sure they can find a solution like selling for cash.

It could be exaggerated but the Chinese government probably doesn't care about the current bitcoin run. It's either they find a rich individual and trade P2P regularly or move to another jurisdiction where selling bitoin OTC is allowed if this clamping down gets even worse.

I still find it weird that countries like China bans trading but not mining.

Has BTC ever been an option at all? I don’t think so, because any form of decentralization in an absolutely centralized state was never out of the question. The CBDC really has the greatest progress in China, and I know they’ve already had a few big tests - I have no doubt that they will implement it and thus control the flow of money even more. They may fear that the Chinese will turn even more to BTC in that case, so they have turned their attention to the OTC market - but they will never be able to prevent p2p.

As mentioned by avikz what we see with Chinese authority is good to the decentralization of the bitcoin network. China has big hands over the bitcoin network through majority of mining taking place within the country. They have each and everything for their nation leaving the rest of the world. Somehow this isn't too late, because the government is already against the bitcoin as the country is developing their own cryptocurrency.

Someday the network will get under an authority if this continues with majority of the miners being in China. So, now itself the slow and steady spread of miners around the globe will give true meaning for decentralization.

Unfortunately, it still does
The last fee spike was caused by the end of the rainy season with miners unable to move their gear or having been cut from cheap coal power, a 16% difficulty drop, 16% lower network capacity and it did affect us all. If they start cracking for real on miners there we might see another serious drop and this time the whole timing would be that of a sci-fi movie, 2013 remake.

But at the same time, the sooner it happens the better, it's time we get rid of this whole thing,  I've had it with their constant banning and unbanning of bitcoin, with the whole drama of Chinese mining gear and pools and manufacturers. The sooner all that gear there is rendered useless and turned into kettles the better, having so much equipment in the reach of a government capable of doing anything to protect their party and their power is not something I want to think of before going to sleep.


Yeah, I'm pretty sure Star Xu, the CEO of Okex can help them with this. /s

What are the electricity prices in China? Is it more profitable to engage in mining there?

Another one reason why Chinese miners needs to go out and look for another country to operate in. What China is doing right now is instead of taking advantage that miners are mostly in China they are doing these things that will just sway them away. Chinese miners have been starting to go out and look for other countries ever since they see their electrical cost in China is too expensive now they gave them an issue about paying their electricity bills which is simply insane. They might regret this later if they continue on doing these kinds of regulations and enforcement that affects them.

This opens up a new opportunity for mining firms outside China to start anew. Admit it or not, the hash power has been ridiculously centralized and clumped in the country for a long time and it needs to be distributed. Though the idea of these companies banding together to do some nefarious things on the network is pretty low, preventing even just the idea of it is better than having some regrets later. Also, I think that these same miners would just go somewhere else wherein they can get some pretty decent deals with power companies, or that they will see some OTC brokers outside the country willing to buy their coins to stay afloat. They have connections, and they will surely put it to good use in order to keep on hashing for profits.


For the provinces, yes. Most of China is trying to shift over towards hydroelectricity as a replacement for fossil fuels. Though in particular, can't seem to find any credible sources for the per kWh pricing, but it is safe to assume that it is cheaper than its fossil fuel counterpart.

I guess lots of the problems crypto users maybe facing there & other places are due the national laws. I think developers should focus more on building truely decentralized applications that comply with all the good/moral laws of nations in order to make crypto more acceptable to the authorities. . I doubt anyone will reject this (the complying with good national laws), not even the govt, unless they think it's OK to comply with bad/immoral laws.  I wonder if there is anywhere on earth where decentralization, transparency, immutablity, privacy, safety, and other important crypto principles are not considered human rights for innocent & law-abiding people?

Oh well, that sucks. But does it surprise any of you? China's been against most things they can't control, so the possibility of miners actually having issues with the Chinese government has always been high imo. They knew it's a Communist Party who leads them, and I doubt the party will ever do anything in the miners' favor. The story might've been different if they could've somehow used mining and hashrate % as a tool of control and surveillance in advantage against other countries. I mean, it's a hassle to handle Bitcoin txs through banks even in democratic countries where freedom is supposed to be a priority.

moves like this have always made things a lot easier and much more profitable for foreign investors. basically anyone who lives outside of their jurisdiction makes the investment to buy ASICs to mine bitcoin inside the jurisdiction with the cheap electricity but they are receiving the coins abroad and sell it abroad and only pay the bills while pocketing the profit.

Ahh of course, this should works. While moving all the ASICs to outside the country will cost a lot, it will be better for them to cooperate with foreign investors or buyers if they can't sell bitcoin through otc desks. There will always a way to move the funds from outside to this country, right?
If this can't solve the problem, china's miners have no other choice but to move the operation site, just like the exchanges did.

It is very difficult for Chinese miners to win the Bitcoin electricity bill payment struggle. In China bitcoin is accepted as an asset, but it is forbidden to be used as a currency. I think that a totalitarian government like China will not give in to anyone.

Why don't you let them decide that for themselves?  Maybe some of them need it because they aren't on board with what their crazy totalitarian leaders are doing.  Maybe it's a statement of resistance on their part.  Or perhaps they have reasons that have nothing to do with your scorn of their government.

I'm guessing there are people in China who probably don't like your government either.  Try to keep things in perspective.  They're just people, like you.



Good thing it's not up to you, then, isn't it?  You're starting to sound pretty authoritarian yourself when you proclaim that miners from certain geographical regions aren't welcome. 

So, if OTC is being cancelled in their country, does that mean they will not be able to transfer their btc outside their country in an otc deal and get their fiat? They can use many available fiat transfer models to receive Yuan in their account, the big deal though is the conversion rate of 2.5% (forex fee) and they may get less due to being helpless here. Why doesn't China stop the use of btc there totally if they do not want their citizens to get involved? Why are they imposing their own rules on miners? Where is freedom, then?  >:(

They knew the risk of taking up mining in an authoritarian, socialist country where you can get publicly executed in 21st century.

The demand is so high that even if they're forced out of the country by their government there will be other places that will take over and become the mining hubs of the world.

Another instance of government intervention destroying prosperous businesses and punishing people for choosing an honest trade.

BTC price had already moon but they can't pay the bills, that's odd. its not like they have no people in US where to send their BTC and exchange their coins and send it back. they can pay their bills but the frozen bank accounts are their problem.  they do have law there so its just that its making them difficult. its the law. they can't get around to it when they need to exchange their money to fiat to pay bills.

China dislikes bitcoin simply as they do not directly control it. That negative attitude towards innovation and progress they don't control will hurt their expansion efforts and dull their competitive edge. China has a crypto mining advantage, which they could succeed in losing. Thanks to their own hard work and effort. The same precedent could apply to other sectors. We know that their surveillance network limits travel and basic freedoms which will hamper job markets, invention and development. The USSR had many similar issues, one reason why many russians were enthusiastic about abandoning it. These negative ideological trends are often noted in china's economic growth and activity failing to meet expectations.

Should that not lead people to respect them more, though?

Ordinary people in authoritarian countries are taking a bigger risk than the majority of us to take part in this system, yet so many people living in relatively free nations give them nothing but shit for it because they don't like the leaders of that country.  I find it quite distasteful, personally.

There are of course different ways of looking at their situation.

We can either say: why are they even trying instead of showing their government the middle finger and leaving to start a business somewhere else? Why struggle and then pay taxes to the slave drivers that made it so hard to earn anything in the first place?

...or we can admire them for their diligence.

Agreed that this might only be a nuisance for Chinese miners in exchanging their coins to yuan. However, this also shows that it can become very concerning if your cryptocoin mining business depends on government regulated banks for the ability to pay electricity bills.

China cannot ban anyone from making a BTC transaction, so any miner can sell their coins anywhere in the world. Even if the problem is not that they receive the earnings in their bank account, how will they justify that earnings to the authorities if trading with BTC is prohibited? The paradoxical situation is that they produce something that is forbidden to trade, and in order to produce it they use electricity sold to them by the state.


The Chinese authorities have some of their own reasons for doing this, and it is completely frivolous to ask where freedom is - in communism, freedom is a rather unknown concept. You do what they tell you, if you rebel or create problems you go to a concentration camp or in a mass grave. I had the misfortune of living in a country that left behind over 1000 mass graves (https://inavukic.com/2016/10/05/the-haunting-reminders-of-depravity-of-communist-crimes/) with over 1 million killed in the 45 years of communist rule.

So I read an online article's title that basically says this is the reason why bitcoin is surging. The miners from China cannot offload their bitcoin ;D I didn't bother to read the content of the article but if selling is done through OTC, it shouldn't be affecting the price. Right?

@Bttzed03. It would be the same because OTC traders sell their coins to the exchanges where there is much liquidity. This is a bull market whether the miners can or cannot sell.

In any case, good news or good rumor for the Chinese miners hehe. OKex CEO shall be released from police custody.

OKex is one of China's OTC trading desks for Chinese miners and their CEO was taken by police for accusations of money laundering. I do not have updates on their banking situation, however.

Also, there are rumors that Huobi's OTC trading desk is being investigated by police.



The exchange reported losing contact with Xu on Oct. 16 and was forced to suspend all trading account withdrawals, as CoinDesk reported at the time. Chinese media outlets reported Xu was in police custody but, speaking to CoinDesk, OKEx denied the investigation of Xu was related to money laundering.

Rumors started circulating on Twitter Wednesday that Xu has been or will soon be released from police custody.

Source https://www.coindesk.com/okex-token-okb-star-xu-release

I talked to one of my Chinese friend and things are getting really scary there. The authority used to not bother people for trading crypto and most of the people could easily buy, sell and trade crypto with their mobile. But with the recent crackdown, there's a growing frustration among the people. The policy in China is affected by the power struggle of the CCP and they assume things aren't going to change unless there's a large shift in power structure which they say is likely as a lot of people are unsatisfied with current leadership.

What else are you expecting from a country with a government that doesn’t let them exercise their right in most situations? They have released their own cryptocurrencies and of course they will be expecting their Chinese citizens to be making use of the digital Yuan, and they will see Bitcoin as a threat to their own digital money that’s being released.

Anyway, that is not going to stop Bitcoin, Chinese people are not the only people that are mining Bitcoin, there are so many other countries where Bitcoin is being mined. With that said I still know for sure that what their government is doing is quite wrong, it would have been better if what they did was regulate it to avoid money laundering and all that, but banning it completely is something I don’t like at all.

That is ridiculous on China's part and I am sorry, I forgot this that the country is under government control, a communist country it is. There must be something to save miners from going into the grave if their government is not helping them in any way, but are also not cracking down btc completely. Can't miners try to sell their btc and show it as freelance money received in their accounts? They can sell for PayPal or ask their trusted persons to send fiat to them via an e-currency provider against their btc.

The Chinese government is not going after OKex and other bitcoin OTC trading desks. It is going after the money launderers who are using the OTC trading desks.

In any case, it has been confirmed that Star Xu has been released from police detention and unrestricted withdrawals from OKex will be allowed again.

I speculate that he might have begun to cooperate with the Chinese government to trace some questionable transactions.



Mingxing “Star” Xu, founder of OKCoin and CEO of OK Group, has resurfaced after being detained by Chinese police.

The exchange said in its announcement that it is preparing to allow “unrestricted withdrawals” by Nov. 27.

Source https://www.coindesk.com/okex-founder-star-released

In my opinion, it will be considered a non-issue for many, and many would think that it will not really affect Bitcoin in any way. Many miners would be forced to shutdown their mining operations if they cannot bring everything to another country. China could not control Bitcoin that is why they are against it. Shutting down the OTC operations is disastrous for these miners. But as many would think, these miners should have other ways of communicating with the outside world and should have thought of other ways. But that is also another problem altogether. I think they is nothing else they can do but to go to another country.

To be honest, I don't understand why mining businesses did not move out of China yet. Cheap electricity is one thing, but China is a very strict authoritarian country, and its attitude towards cryptos and mining has been unstable for a while. Sometimes the authorities there just don't care, but other times they're making it hard for crypto users. And yet if this map  (https://cbeci.org/mining_map)is correct (and Cambridge sounds legit to me), 65-70% of mining is still done in China. I wonder if there's at least a tendency of mining farms relocating or not.

Read the news. This is not an attack on bitcoin, this is only an issue of money laundering operations using OTC trading desks and bitcoin. The banks have closed accounts of all cryptocoin users including the miners as casualties. The problem appears to have been resolved, however.