Bitcoin Miners in China’s Remote Regions are Undeterred By Restrictions

[alyssa85]

https://www.ccn.com/bitcoin-miners-in-chinas-remote-regions-are-undeterred-by-restrictions/

Though Chinese authorities have previously taken various measures aimed at curtailing the trading of cryptocurrencies, the mining of Bitcoin has continued unabated in some of China’s remote parts according to a Nikkei Asian Review report.

These regions enjoy excess electricity supply capacity and are considered poor relative to the economic powerhouses of Beijing and Shanghai. They include Sichuan Province, which is fondly known as the capital of Bitcoin mining, and Qinghai Province.

In China’s Qinghai Province one of the large-scale mines is owned by the ‘fuerdai’, a term used to describe the rich kids of the country’s military and Communist Party officials and other elite. While both Sichuan and Qinghai provinces enjoy abundant and cheap electricity, the two neighboring regions are relatively poor due to their heavy reliance on tourism and the mining of ground resources. Qinghai, for instance, plans to develop cryptocurrency as an industry in the hopes of creating jobs and generating revenues for the local government.

While there were reports earlier in the year that Chinese authorities were putting in place measures aimed at severely curtailing the mining of cryptocurrencies this has not materialized. According to Nikkei Asian Review, one of the reasons why a complete obliteration of the sector has not happened is because China is keen on influencing the international flow of money. The United States already enjoys this power through the U.S. dollar and cryptocurrencies could do the same for China.

“Xi [the President of China] desires this power for China, similarly to how the U.S. seeks to retain the dollar’s key-currency status through its network of transactions worldwide,” observes the Japanese publication.

Currently, it is estimated that China’s share of the globe’s cryptocurrency mining capacity is around 70%.

Hopefully Quebec and other places will see the light about letting bitcoin mining happen in their areas.

[jseverson]

While there were reports earlier in the year that Chinese authorities were putting in place measures aimed at severely curtailing the mining of cryptocurrencies this has not materialized. According to Nikkei Asian Review, one of the reasons why a complete obliteration of the sector has not happened is because China is keen on influencing the international flow of money. The United States already enjoys this power through the U.S. dollar and cryptocurrencies could do the same for China.

That does make a lot of sense, though I still wouldn't compare the USD and crypto in this context. If this is true, China is better off allowing exchanges and regulating them tightly to minimize capital flight, which was apparently their problem in the first place. Who knows though, they may be in the process of doing just that.

But yeah, Bitcoin does bring money in, so I'd be quite surprised if they killed it off. I personally would prefer it if mining were more distributed across the world though. Having 70% of the hashpower behind the Great Firewall gives the Chinese government more influence than it should have.

[bartolo]

Maybe the explanation is simpler and the Chinese government is allowing mining in these regions because this activity can be an economic stimulus in areas of the country that are considered poor. If China's intention is what the article suggests, the hostile attitude that the Chinese government has had until now towards cryptocurrencies does not make much sense, unless it's only pure appearance.

[timerland]

Yeah, it's actually pretty surprising to me at least that other countries with cheaper electricity aren't mining at the same rate that China does. Perhaps there are reasons that I don't know of (in which case, someone please correct me).

one of the reasons why a complete obliteration of the sector has not happened is because China is keen on influencing the international flow of money. The United States already enjoys this power through the U.S. dollar and cryptocurrencies could do the same for China.

Controlling the mining power within bitcoin certainly means importance in the crypto world, and I think that potential is seen here.

But it still doesn't make sense trying to gain influence over bitcoin while basically disallowing exchanges to exist in their country. To me, China would be much better off if they are able to have functioning and regulated exchanges instead of all of them relocating to overseas areas.