At one point in time, China was leading the world in bitcoin innovation. When most of the world was discrediting the technology, China adopted it. It was being experimented with by entrepreneurs and greedy investors who wanted a piece of the buy.
This fostered an ecosystem of bitcoin miners, probably the largest in the world. Miners raked in bitcoins and everyone seemed to be happy.
Over the last 2 years, things turned for the worst and in 2021 the inevitable had taken place. The Chinese government decided to get rid of anything cryptocurrency within the nation.
They went on an agenda to wipe out mining farms. Some of these farms had taken hundreds of thousands and often millions of dollars to build.
They created laws to ban cryptocurrency trading and other financial activity which included cryptocurrency. This onslaught never started with cryptocurrencies, it spilled over the entire technology industry.
It’s a move that we have yet to see the grand vision behind. I am sure the government is taking its time to carefully unveil a plan.
Innovate or Die
Despite China’s powerful system of control, they still haven’t controlled the entire cryptocurrency ecosystem. In fact, they have allowed the bitcoin miners to adapt quickly and push the operations underground. It’s a risky move, but everything within the cryptocurrency space is risky.
Consumer News and Business Channel (CNBC) covered an article on the topic of the entire operation of China’s crypto miners. It is reported that 20% of the world’s bitcoin miners are still within China. Ben, a Chinese miner which was interviewed by CNBC, told them he had gone completely off the radar and pushed operations underground.
He cheekily spreads his mining operations across different locations to avoid getting caught using power on the grid at a centralized location. Also, he took careful action to hide his digital geographical information by going behind the meter and getting electricity from small power sources.
This goes to show the lengths that persons will go to in order to keep their crypto dream alive.
Diminishing Returns
Despite going through all those loopholes to mine cryptocurrencies, it’s still not seen as profitable anymore within China. Most of the largescale miners have jumped ship to other countries which might act as a safe haven for now such as the US.
The smaller ones, who never had the resources to move overseas are only using the local Chinese mining farms to make enough money to move overseas.
It’s a risky business, but in this world of uncertainty, taking a risk on something is better than taking no risk at all.
