China has never banned Bitcoin mining, says report

In a striking revelation that challenges widespread perceptions, Bitcoin (BTC) environmental impact analyst Daniel Batten has revealed that BTC mining was never officially banned in China. According to Batten’s research, despite widespread reports, the so-called “ban” was actually a temporary suspension, and mining operations have largely resumed across the country.

Batten’s report highlights that the hashrate within China, a measure of the computing power used in mining and processing Bitcoin, currently accounts for about 15% of the global total. This information stands in stark contrast to the dominant narrative that emerged in May 2021, when numerous major news outlets reported that the Chinese government had initiated a comprehensive crackdown on crypto transactions and mining operations.

This is why Batten argues that the drop in network hashrate, which dropped from 179.2 EH/s to 87.7 EH/s – a 51.1% reduction – was temporary and misinterpreted as a permanent ban. “If you are a disruptive student and the principal expels you from school, those ‘absence days’ do not mean you are suspended. It could mean that you have been temporarily sent away,” Batten explained, using an analogy to illustrate the situation in China.

Further investigative journalism supports Batten’s claim. For example, reports immediately after the “ban” indicated that many miners remained operational and unfazed. CNBC and NBC both reported on ongoing mining activities within China. Furthermore, by December 2021, mining activity had recovered to 19.1% of the global hashrate, according to Cambridge data, indicating a significant recovery.

“We have spoken to several mining companies and mining distributors in China. The message is clear: if you are small, useful and not using it to get money out of China, you are welcome. This philosophy has made Bitcoin mining more distributed and more clean energy-based,” Batten added.

Innovative applications of Bitcoin mining in China reportedly include harvesting wasted renewable energy and recycling heat, indicating a more nuanced approach to Bitcoin mining than previously understood. Batten also noted that local provincial governments often actively support Bitcoin mining, especially when it comes to small-scale operations that contribute to local energy solutions without trying to circumvent capital controls.

“If you have 200-500 miners and want to do renewable energy mining, you are welcome. This is especially true in Inner Mongolia, the Texas of China, which has a lot of wasted renewable energy that they want to monetize,” Batten stated, adding that “China allowed the miners to come back that served a specific purpose.”

Moreover, there is no more off-grid coal-fired mining. “Mining is mostly hydroelectric, much of which is sub-1MW,” Batten revealed. This is in line with China’s commitment to achieve carbon neutrality by 2060. For example, the “ban” on Bitcoin mining appears to be part of a broader effort to reduce the energy intensity of high-use industries.

According to Batten, Western media have largely misreported this dynamic. This misunderstanding has perpetuated a false narrative about China’s attitude toward Bitcoin mining, which Batten wants to correct. Supporting this perspective, Jaran Mellerud of Hashlabs noted: “There are still several major miners operating in China. The local government allows them to operate because they urgently need economic activity there.”

These findings not only challenge the mainstream media’s portrayal of China’s policies, but also highlight a broader pattern of misinterpretation and sensationalism in reporting on the legal and regulatory status of Bitcoin mining worldwide.