Want to read Slashdot from your mobile device? Point it at m.slashdot.org and keep reading!

 


Forgot your password?
Close
typodupeerror
×
Bitcoin China The Almighty Buck

China Will Likely Ban All Bitcoin Mining Soon (arstechnica.com) 194

Posted by BeauHD from the taste-of-things-to-come dept.
An anonymous reader quotes a report from Ars Technica: Bitcoin took investors on another rollercoaster ride over the weekend after a top regulator in China announced a crackdown on mining, a new tack in the country's ongoing fight against the cryptocurrency. The government will "crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the society," said the statement, which was issued by the Financial Stability and Development Committee of the State Council, the country's cabinet equivalent. The committee is chaired by Vice Premier Liu He, who acts as President Xi Jinping's top representative on economic and financial matters.

"The wording of the statement did not leave much leeway for cryptocurrency mining," Li Yi, chief research fellow at the Shanghai Academy of Social Sciences, told the South China Morning Post. "When all mining activities are banned in China, it will be a turning point for the fate of bitcoin, as a large chunk of its processing power is taken out of the picture." The Chinese government isn't just worried about financial stability, either. A commentary piece in Xinhua News, the Communist Party's official media outlet, elaborated on the government's stance, voicing concerns about bitcoin's role in money laundering, drug trafficking, and smuggling. It also mentioned bitcoin's profligate energy use. Last week, China warned financial institutions not to participate in crypto-transactions or related services.

The combination of bitcoin's high price and its tremendous energy demand has pushed miners to take extreme positions. Miners in China have flocked to provinces such as Inner Mongolia, where cheap coal power makes mining more profitable. The scale of these facilities reflects how much money investors have sunk into the projects. At least one mining facility in Inner Mongolia draws more than 50 MW. Similarly large operations are popping up in the US, too. In upstate New York, a private equity firm bought and revamped an abandoned power plant just to mine bitcoin. When its data centers are completed, mining will consume 79 percent of the power plant's capacity, or 85 MW. China's warning to bitcoin miners is certain to push many operations out of the country. At least one bitcoin observer said that he anticipates miners pushed out of China will set up operations in Mongolia, Kazakhstan, and Afghanistan.
This discussion has been archived. No new comments can be posted.

China Will Likely Ban All Bitcoin Mining Soon More

China Will Likely Ban All Bitcoin Mining Soon

Comments Filter:

  • Awesome (Score:3, Funny)

    by shaitand ( 626655 ) on Monday May 24, 2021 @04:52PM (#61417546) Journal
    As a fan of freedom and independence and a long term investor in Bitcoin I for one would love to see China permanently exit the game. Unfortunately that isn't likely. They've 'banned' things before.

    • Re:Awesome (Score:5, Insightful)

      by Pentium100 ( 1240090 ) on Monday May 24, 2021 @04:56PM (#61417568)

      It probably also serves as a way to get rid of the small miners, while all the major miners just bribe the various officials and the ban does not apply to them.

      • Re: (Score:1, Informative)

        by AmiMoJo ( 196126 )

        China had a massive crack down on bribery some years back. With stiff penalties it put a stop to much of it, even near the top of the CCP.

        Chances are good this will work. Next time someone says "but China" as an excuse to pollute, remember China was the first major economy to ban crypto mining.

        • Thatâ(TM)s just China propaganda. Everyone knows bribes work very well in communist regimes because the same political party that is supposed to enforce the law is filled by people that need to keep their family, power and operations afloat by receiving the bribes.

    • Re: (Score:2, Funny)

      by Anonymous Coward
      "My game is all about Freedom so if you live under a Totalitarian Regime then I want you banned from playing," is some classic Libertarian logic.

      • Re: (Score:1, Redundant)

        by shaitand ( 626655 )
        Not at all. We are fighting an oppressive totalitarian regime which has taken over in the US and has been releasing anti-bitcoin propaganda not much different than that of the regime in China. Your argument sounds more like a BSD supporter trying to claim we don't support freedom if we don't support the right to close up the source.

        Bitcoin represents an opportunity to separate economic power from the control of state and central banking systems. In a regime like China where all players are essentially arms
        • you can still do that with cryptos that dont need mining. banning mining is a good thing, the sooner the 1st gen coins that dont level up to proof of stake are forgotten the better.

  • China is leading in banning cryptoscams.

    • Re:This is the way (Score:4)

      by dackroyd ( 468778 ) on Monday May 24, 2021 @05:16PM (#61417682) Homepage

      They've probably realised how vulnerable they are to it.

      Senior management at a company could install employees, who were secretly told to leave backdoors open, then the 'hackers' come along and hack their systems.

      Company manager: "Oh no! How could this ever happen! We'll have to pay the ransom to get our system back! And no-one will ever be able to trace that money! You have no idea how terrible this makes me feel! I must resign in shame, to live a life of retirement in exile! Maybe some place with a beach, or the rule of law...."

  • good GPU's pricing needs to get back in line! (Score:4, Interesting)

    by Joe_Dragon ( 2206452 ) on Monday May 24, 2021 @04:56PM (#61417572)

    good GPU's pricing needs to get back in line!

    • GPUs don't mine bitcoin (Score:5, Insightful)

      by drnb ( 2434720 ) on Monday May 24, 2021 @05:03PM (#61417604)

      good GPU's pricing needs to get back in line!

      GPUs do not mine bitcoin, they mine etherium and various other alt-coins. Bitcoin moved beyond GPUs and on to ASICs long ago. Etherium is planning on transitioning from a proof-of-work based system (mining) to a proof-of-stake based system (non-mining). In theory this year. So don't expect GPU availability and prices to get back to "normal" earlier than 2022. Even then there will be the potential hazard of some alt-coin gaining popularity and becoming profitable to mine.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        What is the stake though? If it's just number of computers running the client then Raspberry Pis will be out of stock soon.

        • The golden rule:
          He who has the gold, rules.

          Proof of stake coins are held hostage by the whales.

        • the stake is people or pools with 32 eth. you can run a node on rocketpool with 16 eth (and the other 16 come from smaller players who do not run a node and just invest) or other places provide options. personally ive been testing a node on the eth2.0 pyrmont test network and found a vm running on cpu on an existing pc was sufficient. if your going to do it you need a stable system as there are financial (in eth) penalties for downtime. The eth devs have a note on their site that they are currently expectin

          • Re: (Score:2)

            by AmiMoJo ( 196126 )

            So basically if you already have money you can make more money, otherwise all you can do it sign up to help someone else get rich and accept the crumbs that fall your way.

            I think I'll give that one a miss, unless there is some way to get 32 eth. for free.

            • Staking doesn't make you rich, any more than investing in government bonds does. It's just a relatively low risk way to park money.

              For the economy to work most people need to be incentivized to do or make something valuable, not play around with currency.

      • More accurately, the bitcoin progression was CPU -> GPU -> FPGA -> ASIC

        I quit mining after FPGAs (and made a nice profit on my ButterflyLabs miners). Just wish I had held onto the coins from then!

        • More accurately, the bitcoin progression was CPU -> GPU -> FPGA -> ASIC -> POP
      • Pretty sure TFA is using "bitcoin" like people use "Klenex".

      • You are correct. Alt coins will fill up all of the slack.

        All of the existing mining hardware (GPU and ASIC) will be used for something. It's not just going away or worthless.

        So there will be coins for ASIC and coins for GPU (here they make the algorithm excessively complicated, think little VMs and other tricks to prevent ASICs).

        Don't expect demand to go away until alt-coins prove worthless (which I don't think they will). RVN and RYO are decent alt-coins (once ETH switches from proof-of-work).

        The failure

    • Re: (Score:2)

      by Entrope ( 68843 )

      If China bans cryptocurrency mining, ASIC mining will drop in frequency. More of the mining rewards will go to GPUs miners. Do you really think this will make GPU prices go down?

      • Re: (Score:2)

        by Rei ( 128717 )

        ASICs and GPUs compete for fab capacity. Yes, retooling takes several months, but the overall market is rather fungible. Net global capacity additions, by contrast, are on the order of years.

        • Re: (Score:2)

          by Entrope ( 68843 )

          In other words: In the short term, we can expect GPU prices to go up considerably, because GPU demand goes up before fab capacity is reallocated. In the mid term, we can expect GPU prices to go up, because GPU demand goes up while demand for ASIC miners gets reallocated across the entire industry (the increase in demand for GPUs will likely exceed the increase in supply of fab capacity that is used to make GPUs). In the long term, who knows, but we can see the trend.

          • Re: (Score:2)

            by Rei ( 128717 )

            Why exactly in none of your scenarios does ASIC demand go down when bitcoin mining demand goes down?

            • Re: (Score:2)

              by Entrope ( 68843 )

              Who ever said that Bitcoin mining demand will go down? Bitcoin mining supply will go down when China bans it.

              • Re: (Score:2)

                by Rei ( 128717 )

                Bitcoin mining demand corresponds with fees, which decline as Bitcoin interest declines.

                In particular, a decline in fees reduces new purchases of hardware; existing hardware generally continues to operate until it's no longer worth the electricity cost.

                • Re: (Score:2)

                  by Entrope ( 68843 )

                  Fees have to do with how many people want to transfer Bitcoin. If you can show that a significant fraction of that demand is related to cheap Chinese electricity, please do so.

                  It seems to me that even if newly mined coins are sold quickly, somebody must be buying them. Because Bitcoin's network tries to keep the block rate roughly constant, the supply of newly mined BTC will not change that much, and so a Chinese ban on mining will not change the price of BTC.

                  If China were to impose an effective ban on cr

                  • Re: (Score:2)

                    by Rei ( 128717 )

                    Fees have to do with how many people want to transfer Bitcoin.

                    Fees correspond with prices, and have always corresponded with prices, because more people have an interest in trading Bitcoin the more valuable it is, and particularly when its price is on an upswing.

                    It's a highly visible correlation in the data.

                    • Re: (Score:2)

                      by Entrope ( 68843 )

                      And I am saying that Bitcoin prices have to do with Bitcoin demand, not with the number of miners. There is a correlation between BTC price and number of miners, but only because high prices causes more people to want to mine. When a government bans people from mining, it means the fees go to other miners -- increasing the incentives for them. Like I said at the very beginning of this thread, that can be expected to increase rather than decrease GPU prices.

      • If China bans cryptocurrency mining, ASIC mining will drop

        China uses more ASICs, but they aren't going to toss them in a landfill.

        If miners can't use ASICs in China, they will be shipped someplace like Iceland and put back in service.

        • Re: (Score:2)

          by drnb ( 2434720 )

          If China bans cryptocurrency mining, ASIC mining will drop

          China uses more ASICs, but they aren't going to toss them in a landfill.

          If miners can't use ASICs in China, they will be shipped someplace like Iceland and put back in service.

          Iceland does not have the excess electrical capacity to increase mining by 10x. Plus they are more sensitive to carbon emissions so they may prefer to have their electricity being used to displace fossil fuel use.

          Plus the expense of relocating the hardware, any new fees or costs, may make a lot of currently marginal ASICs unprofitable to relocated. ASICs are relatively heavy and bulky due to the heat sinks. Part of the low cost of China was minimal shipping costs from factory to colocation facility.

        • The summary already provided examples of where they expect the miners will move to.

          At least one bitcoin observer said that he anticipates miners pushed out of China will set up operations in Mongolia, Kazakhstan, and Afghanistan.

  • get out now but save the IRS cut or you may be in for some big fines / even hard time if you don't pay.

  • took long enough (Score:1)

    by Anonymous Coward
    crypto was an obvious way to evade currency controls. Buy $40,000k of electricity, get a bitcoin, transfer a number to Canada/US/Europe/Israel, convert number into $50,000 of foreign cash, the Chinese government has no say in the matter.

  • The market should soon be flooded with GPU's of varying quality, if this is true.

    What goes bad in these cards once folks have used them for mining 24/7?
    --
    I'm a dreamer. I have to dream and reach for the stars, and if I miss a star then I grab a handful of clouds. - Mike Tyson

    • Re:Can I get a GPU yet?! (Score:4, Informative)

      by Rei ( 128717 ) on Monday May 24, 2021 @05:11PM (#61417652) Homepage

      Bitcoin is mined with ASICs, not GPUs. Most altcoins are mined with GPUs.

    • Re:Can I get a GPU yet?! (Score:4)

      by jwhyche ( 6192 ) on Monday May 24, 2021 @05:15PM (#61417674) Homepage

      Mainly the fans come to mind but that is a easy fix. The big issues is they overclock them, forcing more voltage through the chips. Sometimes to and over the recommended specs for months and years at a time. This leads to over heating and a break down of capacitors and power transistors.

      My advice is if the market is flooded with a shit load of high end cards at basement prices, run away. Run far away.

      • Re:Can I get a GPU yet?! (Score:5, Insightful)

        by BadDreamer ( 196188 ) on Monday May 24, 2021 @09:13PM (#61418498) Homepage

        Miners do not overclock chips. They want peak performance per watt, not simply peak performance. Normally that means slight underclocking, to reduce power use.

        Thus, mining cards are usually in excellent shape.

        • This is something I often read but it's not true in practice. At this point it sounds like miner 'apologism'.
          In the real world mining rigs often cramp tens of GPUs closely toghether.
          Furthermore the GPus are never removed or powered down, and as such gather large quantities of dust which is never cleaned. I've seen photos of mining GPUs that were so full of dust it's a wonder their fans spun at all.
          Also, the components on GPUs were not built for 24/7 mining. For example the VRMs are constantly active duri

    • This depends on how well the card was treated, in particular the cooling.
      If the card was seen by the miner as a consumable item, it may be overclocked and run hot for a couple of years, knowing this will eventually lead to the failure of the card. A smart miner may count on the potential failure and sell the card before it fails - it will tend to become unstable running 24/7 at higher temperatures, once it starts crashing in the mining software, it may still run well enough when not overclocked and with dec

  • It actually would be the second turning point (Score:5, Informative)

    by drnb ( 2434720 ) on Monday May 24, 2021 @05:08PM (#61417634)

    "When all mining activities are banned in China, it will be a turning point for the fate of bitcoin, as a large chunk of its processing power is taken out of the picture."

    We already had a turning point, that was when mining hash power centralized in China. Going back to being globally decentralized would be a very good thing. If that hashing power did not return the bitcoin network would simply readjust the difficulty level for whatever the currently available hashing power is. This happens automatically.

    • Re: (Score:3)

      by AmiMoJo ( 196126 )

      Except that wait times for processing transactions are already ridiculous and will only get worse. It's kind of hard to buy many things when the transaction takes days to process.

    • More old coal plants getting taken out of the mothballs in the US would be pretty disastrous for Bitcoin's image, the lie about surplus hydro is easier to tell when it's all done in China.

      As the mining profit rises, restarting old plants will be the main way to meet the demand ... because you can't exactly count on it lasting 3 decades.

  • Nothing to do with Bitcoin (Score:5, Insightful)

    by theshowmecanuck ( 703852 ) on Monday May 24, 2021 @05:21PM (#61417708) Journal
    This has nothing to do with whether Bitcoin is right or wrong. It has everything to do with control of China's population. A Chinese citizens ability to access an independent currency, whether it is crap or not, takes away some of the control the Chinese Communist Party's has on that person. Autocracies like China's cannot let that happen. It is anathema to the CCP. If you ever see a cryptocurrency that is accepted by China, you can be sure it is one that they have some sort of control over, at a minimum.

    • I have serious doubts about that (Score:5, Interesting)

      by rsilvergun ( 571051 ) on Monday May 24, 2021 @07:25PM (#61418216)
      China heavily subsidizes power for various manufacturing purposes, and that power is often dirty as f***. As in black smoke spewing coal plants. Furthermore Bitcoin is primarily used to launder money and/or buy drugs.

      You have something that's using a ton of subsidized power, creating a ton of pollution in a country that already has major problems with pollution and on top of all that the primary use cases are risky speculation and crime.

      While I'm sure maintaining control is a factor there are many, many good reasons to ban it. It won't even lead to more freedom. Crypto currencies are incredibly prone to currency manipulation. Meaning powerful people can exercise control over them and by extension you and your assets. It's a lose-lose.

      This is not the direction the human race needs to be going.
      • If you think money doesn't lead to independence, you have your head up your ass. No matter its form. No matter how it fluctuates.

    • There's a related point, which is that the Chinese yuan is not freely convertible, nor is it likely to become so in the near future.

      In any place where the currency is not convertible, but power and chips are available for purchase, a BitCoin miner can convert currency into power and chips, and thence into BitCoin.

      Voila! An asset that can be traded for hard, convertible currency, without dealing with China's export/import banks [harrisbricken.com].

      The other token convertibility play presently employed involves Tether (the cryp

  • Great for altcoins (Score:1)

    by Anonymous Coward

    According to Coindesk right now:

    Bitcoin YTD returns: 34.16%
    Ethereum YTD returns: 252.31%
    Dogecoin YTD returns: 7,530.94%

  • China's warning to bitcoin miners is certain to push many operations out of the country

    just as

    In upstate New York, a private equity firm bought and revamped an abandoned power plant just to mine bitcoin

  • Every 6-12 months China comes out with a "we're really gonna ban it this time, guys!" going back to like 2011. If you believe it this time, you're legendary tier ignorant.

    • As others have said- China will never ban Bitcoin. Once again lots of FUD and press, like every year, but...

      The great firewall hasn't blocked port 8333.

      That could be done in 2 seconds if they were serious.

  • First of all, the link to "announced a crackdown on mining" says nothing of the sort.

    Second, none of this is new. China announced intentions to regulate bitcoin as an investment asset years ago.

    Third, be very suspicious of all this FUD. All of Condé Nast's publications have very selective pitchforks up against Bitcoin right now, which makes me think a prominent investor has BTC shorted or else is buying the dip.

    • First, the link to the actual CCP statement (through Google Translate) does indeed use the phrase "crack down on Bitcoin mining".

      Second, "regulating Bitcoin as an investment asset" is not the same thing as banning mining.

      Third, this post I'm replying to contains at least as much FUD as a hypothetical Condé Nast article that has not been cited, much less analyzed here.

  • Being under the Beijing microscope (Score:1)

    by Anonymous Coward
    It must really suck having to live under the microscope of the Chinese government, your life splayed out like a rat pinned down to a dissection tray, cradle-to-grave.
    Memo to Chinese nationals: Do yourselves a favor and have another revolution. Real democracy ain't no bed of roses but it's better than how you're treated right now.

    Sincerely,
    R.S.
  • for the CCP

  • Banning not-evil, not-immoral, non-destructive behavior will create stresses in the society. We saw it in the US with Prohibition and the ban on alcohol, and we're seeing it now with the ban on marijuana. Normal, decent people will do it because it's not a malum in se ("bad because of its nature") act, more of a malum que prohibida ("bad because it's prohibited") act. I guess it depends on the penalties. We have both speeding and mild drug use: one results in a fine and the other can result in prison time [norml.org],

    • Re: (Score:2)

      by djinn6 ( 1868030 )

      I don't see why there should be an arbitrary line drawn across "bad in nature" vs. "bad by law". Badness is a relative concept and the law is a codification of cultural norms. When a would-be criminal considers whether to perform the criminal act, potential legal penalties are just another consideration among many others.

      Drug trafficking is an executable offence in China and a few other Asian countries. Family of the criminal pays for the bullet. Yet the Chinese populace fully supports this because cultural

  • All those new coal plants being build for consumption driven by Bitcoin aren't paid for by the miners, they have to recoup investment over decades.

    Even though Bitcoin mining brings in foreign currency, at some point the extra coalplants just become an economic liability.

  • If you stop mining then the ones that exist now are instantly more valuable. ... which then makes it more profitable to start mining again.

Slashdot Top Deals

Math is like love -- a simple idea but it can get complicated. -- R. Drabek

Close