Issue #12 Exclusive: China never banned Bitcoin mining

Dear subscriber,

Welcome to The Bitcoin ESG Forecast #012.

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Last time we covered China, we saw that:

1. New hashrate has come into China since the China “ban"

2. Current hashrate in China is ~15% of the global total

3. No off-grid coal-based mining occurs any more.

4. Mining is mostly hydro, much of which is sub-1MW

5. Local provincial govt often actively supports Bitcoin Mining

This month, a more extraordinary reveal: Mining was never banned in China.

Yes, you read that right. In fact, not only was it not banned, but Chinese miners are leading the world in innovative uses of Bitcoin mining.

But what of this Reuters report and others that says it was banned?

Let’s have a closer look.

Yes, network hashrate data dropped from 179.2 EH/s to 87.7 EH/s ( a 51.1% drop) seemingly confirming that China banned mining.

Afterall, China was according to Cambridge 46% of global hashrate the month prior to the “ban” (April 2021). So the figures roughly tally up with the thesis “Mining has been banned in China.”

But there’s a big gap in this logic. If you are a disruptive student, and the principal sends you away from school, those “days absent from school” don’t mean you’ve been expelled. It could mean you’ve merely been suspended. Turns out that’s exactly what happened in China.

Here’s how we know.

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1. Investigative reporting

Let’s start with the reports that came out straight after the “ban”. First, NBC reported that at least some miners were “unfazed” by the latest “ban”. Second, CNBC ran a full report on Bitcoin mining operations still operating within China. Thirdly, Cambridge data showed that Mining activity was 50% recovered by as early as September 2021, and by Dec 2021 was at 19.1% of global hashrate. All three point to mining never being banned, merely suspended. “Ban” makes a better news story of course.

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2. Our surprising find in Chinese legislation