China Bans Bitcoin Mining | Bitcoin Halving Top 21 Moments

China Bans Bitcoin Mining | Bitcoin Halving Top 21 Moments

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moment number four China bans Bitcoin
mining sparking Great Migration of hash
rate in May 2021 China implemented a ban
prohibiting financial institutions and
payment companies from providing
Services related to bitcoin and other
cryptocurrencies including registration
trading clearing and settlement this
directive announced by the national
internet Association of China the China
banking Association and the payment and
clearing Association of China cited
volatility and speculation as primary
concerns this statement highlighted that
virtual currencies are not supported by
real value their prices are easily
manipulated and trading contracts are
not protected by Chinese law while the
ban restricted financial institutions
from offering crypto related Financial
products or Services it did not make it
illegal for individuals to hold
cryptocurrencies the Crackdown was part
of a broader Trend with similar
restrictions occurring in Nigeria and
turkey earlier in 2021 each leading to
varied
consequences despite the extensive
measures CNBC reported 6 months later
that Bitcoin mining continued in China
by May regulatory pressures had
significantly impacted the mining sector
with major major Asic manufacturer bit
main halting sales and a noticeable drop
in bitcoin’s total hash rate by
September China had escalated to a full
ban on bitcoin yet nearly 145 Bitcoin
nodes remained operational in
country reports contradicted each other
regarding the presence of miners a
Chinese cyber security firm identified
approximately 109,000 active mining IP
addresses daily while Cambridge
University suggested no miners remained
the Bitcoin Community met these
developments skepticism noting China’s
history of banning Bitcoin without
substantial long-term effects however
the recent restrictions visibly impacted
the local Bitcoin ecosystem with many
miners in exchanges reducing or ceasing
operations although Bitcoin operates
independently of government sanctions
China’s stringent regulations evidently
shape the local landscape of Bitcoin at
least
temporarily so what is money and how
does it get value paper money has
because someone says so Bitcoin is
different it’s like digital gold it has
value for many of the reasons gold does
but that’s only the start it has a
limited Supply only 21 million so no one
can decide to just print more because no
Central Authority controls it it can
never be shut down and unlike with banks
and credit card companies you don’t need
approval to use it it puts the power
back in all our hands Bitcoin lets you
control your finances Kraken lets you
buy Bitcoin Kraken see what crypto can
be welcome back to the Bitcoin Magazine
having a live stream you just heard it
moment number four China bans Bitcoin
another huge moment with geopolitical
implications I’m joined Now by Mr Ben
gagnan from bit Farms Someone who lived
through the trauma of this moment and we
hope can speak to its gravity Ben how
are you doing Happy
having I’m doing good happy having to
you just a few blocks out I know four
blocks to go so Ben take us in to the
mind of a minor during this moment China
one of the largest geopolitical actors
bans Bitcoin your mining firm I’m
assuming implicated how did this affect
the industry why was this such an
impactful moment for the entire
movement yeah well I mean when the China
mining ban happened China represented
the vast majority of the network uh they
were somewhere around you know in
between 60 to 75% of the network and
China’s also the number one electricity
producer in the entire planet uh and
they have been the number one source of
Bitcoin mining Investments for many many
years so when the China mining EV
happened effectively what that did was
basically took 65 to 70% of the world’s
infrastructure for for miners offline
immediately overnight and so what you
saw was in every having Epoch you have
one massive run up in Bitcoin mining
economics and then the very long uh
crash down to the bottom before the next
hav neoch and things kind of reset uh
with the China mining band we actually
had a double wave it was was the only
time we had a double pump on Bitcoin
mining economics because you you removed
so much of the the physical
infrastructure I think that’s something
that people don’t understand is you know
we still have never replaced that
infrastructure I mean the hash rate is
larger now than it was when the Bitcoin
mining band took place but those
megawatts never came back that physical
infrastructure never came back you know
if China mining ban had never occurred
we’d probably be at 900 P aash or 900x a
hash or maybe even a z ah hash going
into this having and instead we’re at
650 so you know this is a massive Boon
to bitcoin miners like like bit farms
and everyone else because we effectively
have a much much less competitive market
space and much more competitive
economics because of that China Bitcoin
mining de well others that a lot touted
that there has been a bit of a happy
ending here in terms of hash rate
Distributing globally I know you poured
a little bit of cold water on that just
there talking about how some of this
cash rate has not returned but is there
not a positive Silver Lining here did
Bitcoin get more decentralized in your
view for sure for sure I mean we had
70ish per all in one country now we have
that spread around the globe a lot a lot
more evenly so it is helping in terms of
filling out bitcoin’s decentralization
ethos uh you know the United States is
the number one area but we’re seeing a
lot of emerging economy starting to come
up the Paraguay is a big area for
Bitcoin mining now
um Ethiopia is is coming out as an
emerging area for Bitcoin mining and
what we’re seeing is Bitcoin mining is
actually being used to bootstrap a lot
of these economies and infrastructure
projects all around the world you know
in countries where no other Industries
are willing to make those investments in
those areas um but Bitcoin miners are
seeking profit and they’re willing to go
to these areas for cheap power and
opportunity so it’s absolutely been
fantastic for decentralization
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well of course another big aspect of
this narrative is also the
diversification in power sources we’ve
seen stranded energy wasted energy this
idea that Bitcoin is renewable can fuel
a renewable energy future can you speak
to how this transition might have
actually been a net positive impact for
bitcoin’s emissions always
controversial yeah I mean you know you
look at bitcoin’s energy impact and
bitcoin’s emission first of all it’s
it’s nothing I mean it’s a rounding a
it’s like
0.1% of the world’s total emissions so
it it’s it’s basically a blip on the
radar um but in terms of of it being
able to utilize stranded energy and it
being able to monetize these renewable
assets that’s 100% the case um you know
in the areas that we operate you see
that Dynamic it’s areas like Quebec
Central Washington Paraguay Argentina
all of these areas are areas with
massive amounts of electricity
generation capacity that were either
built to power industry which is left
and never came back or built to power
industry that never came and so you know
we are tapping into this infrastructure
in a way that you know no other
companies and no other Industries are
really willing to make those Investments
to do well of course miners hashing
furiously out there with all forms of
electricity want to go back to something
that we discussed a little bit earlier
without you here Ben uh but talk about
there being potential disruptions on the
blockchain a potential of a reorg the
added monetary premium of some of the uh
you know bells and whistles
controversial activities that are
happening on bitcoin with this having
block I’m interested to hear your
thoughts on this idea of the Epic sat
mining this runes protocol launching do
we think we’ll see A disruption uh in
Bitcoin uh in your view as a
minor uh there’s definitely a lot of
activity happening in terms of the runs
and the bidding on on this potential
epic set so there’s going to be an
economic incentive to to play games here
year um if you’ve been watching the test
net over the last couple of days
somebody has been practicing reorgs um
so people have been working uh to try
and make this reality you should expect
that you know because this first block
after the having is is potentially worth
millions of dollars uh with the runes
and the epicat calculation people are
going to try and reorg um this is this
is definitely something that’s going to
happen it’s a very very interesting
economic incentive here uh that we’ve
never seen this could be the most
valuable block that Bitcoin has ever
minded but what’s happening behind the
scenes talking about preparing for
something like a reorg obviously you
have a mining Farm part of a mining pool
who coordinates on this what’s happening
can you take us behind the scenes about
what might be happening within these
companies as they prepare for this
moment which is maybe hours
away yeah the it it’s it’s all happening
at the pool level so the pools are the
ones who are organizing all of the
different activity and are competing
against each other you know the miners
are really just contributing their hash
rate to the pool unless you’re looking
at this massive Economic Opportunity and
you’re saying you know what we’re going
to disconnect from the pool and we’re
going to solo line for for just a few
blocks um I think with the amount of of
of interest in economic activity that
that’s coming out of this first block
that’s certainly something that could
happen um you know there’s an asymmetric
reward there to disconnect from the pool
and solo mine and and try and hit try
hit it big it’s it’s a lottery with a
really good chance of playing out in
your view does this raise awareness of
potential Solutions obviously some
innovators ocean mining being out there
one of them talking about Minor payouts
do you think you’ll be paid fairly if
you contribute to the pool that wins the
having block how are you looking at your
payout structure uh with this epic set
with this having block ahead of
us it it really depends on the pool um
you know Foundry which is one of the
largest pools in the world it’s where
most of the North American and the
publicly traded miners are will
contribute their hash rate uh they put
out an announcement two days ago saying
that they’re aware of this epic sack and
if they find the block they’re going to
auction it off and and donate 100% of
their proceeds to the miners on a proa
basis so you know Foundry has been
mining I mean well they mined the last
three blocks here um and they have you
know a very very good probability of
hitting that so whoever is mining on
Foundry is probably going to get a boo
from whatever happens on this EIC well
Ben appreciate that how do people watch
how do they follow along is there
something that you’re looking at as this
action takes place how long will it be
before you’re confident that we’ve seen
the blockchain finalize its
state well you know every block that we
process makes it a little bit more
secure um I’m personally I’ve got meol
dospace open right now and I’m I’m
watching it live I’m sure a lot of
people are doing it at home um certainly
you know one confirmation here is not
going to be enough this time around uh
people are going to want to watch for a
few blocks because even after a couple
of blocks there might still be somebody
who’s trying to reor this um you know
the more blocks it go it’s the harder
it’s going to be so it won’t take too
long but but certainly there’s a greater
economic incentive to try now than ever
before well of course we’ll be staying
on on the Bitcoin Magazine having a live
stream post show to go over these blocks
to see if anything takes place Ben want
to give your you chance to talk to the
people out there oh we’re out of time
Ben thank you for joining us good luck
thank you with the having block so what
is money and how does it get value paper
money has value because someone says so
Bitcoin is different it’s like digital
gold it has value for many of the
reasons gold does but that’s only the
start it has a limited Supply only 21
million so no one can decide to just
print more because no Central Authority
controls it it can never be shut down
and unlike with banks and credit card
companies you don’t need approval to use
it it puts the power back in all our
hands Bitcoin lets you control your
finances Kraken lets you buy Bitcoin
Kraken see what crypto can be

Join us for the fourth installment of our 21 Moments series, exploring the pivotal moments of Bitcoin’s last halving cycle. In this episode, we dissect the seismic impact of China’s ban on Bitcoin mining and the subsequent migration of hashrate.

🇨🇳 China’s Ban: The ban, enacted to prohibit financial institutions and payment companies from offering services related to cryptocurrencies, shook the global Bitcoin mining landscape. While it targeted institutions, individuals were not barred from holding cryptocurrencies.

⛏️ Mining Sector Impact: The crackdown triggered a significant drop in Bitcoin’s total hashrate, with major player Bitmain even halting sales. Despite continued mining in China, regulatory pressures took a toll on the industry.

💡 Decentralization Discussion: We delve into the repercussions of China’s ban on Bitcoin mining, including the drop in hash rate and the subsequent relocation of mining operations worldwide. This decentralization aligns with Bitcoin’s ethos and fosters a more evenly distributed hash rate globally.

🌱 Renewable Energy: Exploring the role of renewable energy in mining, we highlight its potential to contribute to a greener future. Bitcoin’s energy impact, though relatively small compared to global emissions, can leverage renewable sources and stranded energy, paving the way for sustainability.

💰 Economic Dynamics: Behind the scenes, mining pools brace for potential disruptions, including reorganizations (reorgs) and economic premiums. With the first block post-halving potentially worth millions, the economic intrigue surrounding reordering is a captivating phenomenon.

💼 Money and Value: We contextualize Bitcoin as digital gold, with its finite supply and decentralized nature providing value beyond traditional currencies. Empowering individuals with financial autonomy, Bitcoin stands as a testament to the democratization of wealth.

Don’t miss out on the analysis of these pivotal moments in Bitcoin’s journey! Like, subscribe, and hit the notification bell to stay updated as we uncover the next chapters in Bitcoin’s historic tale. Let’s unravel the past to illuminate the future of finance together! 💡