Will China Ban Bitcoin Mining?

News about China banning Bitcoin mining began circulating around mainstream media yesterday, which was fortunately just another example of the very poor reporting quality, that we are seeing all too frequently from mainstream media these days.

The problem with mainstream media these days is that they love to spread fear and hype in order to get more views, which they require to sell more ads. This results in sensationalist headlines like China plans to kill most of the world’s bitcoin mining operations and similar nonsense.

Let’s take a step back and see what China is actually doing and what impact that might have on Bitcoin.

The report, published on Jan. 4 by the Chinese business publication Caixin, indicated that top regulators in China are planning to withdraw preferential benefits, such as tax deductions and cheap electricity supplies available to bitcoin mining companies.

So essentially what this means is that they’re done subsidizing the Bitcoin mining industry, which is hardly going to hastily bring about the end Bitcoin mining in China.

This change is not surprising given that the Chinese government hasn’t exactly been in love with Bitcoin recently, and will simply serve to remove the unfair advantage that Chinese miners have enjoyed over other competing markets.

In the worse case scenario, Chinese miners will pack up their Antminers and take their business elsewhere. In the meantime, the Bitcoin network will adjust the difficulty levels while they complete the move and it will be very much business as usual.

Depending on when and how the move happens, it may also temporarily increase the fees and transaction times, but it will certainly not cause the unraveling of Bitcoin, as mainstream media would like to have you believe.