China currently prohibits virtual currency transactions and related activities, but there are still industrial developments taking place in China. This article will explain the current situation of China's encryption industry based on foreign media's attention to China's encryption policy trends. This article originates from a Gyro Finance article, organized and compiled by Foresight News. (Preliminary summary: A miner rented an Airbnb and made a huge profit of US$100,000 in three weeks of mining. The landlord was dumbfounded when he collected the electricity bill...) (Background supplement: Mining company Marathon raised US$300 million in excess: 4,144 Bitcoins have been added to the position, directly Is buying more profitable than mining? ) Although China has explicitly banned virtual currency transactions and related activities, from the perspective of global encryption, it is undeniable that the Chinese still occupy an important position in the market, but in recent years this position has gradually been affected Invasion of the Western World. It is precisely for this reason that foreign media have always paid attention to China's policy trends and frequently turned their reporting horizons to China's encryption industry. For various reasons, some reports lack reality and are biased, even seeming a bit absurd, and contain various subjective imaginations about China. For example, a previous Wall Street Journal article mentioned, "China's inland remoteness Crypto users in the province conduct private crypto transactions through laundromats.” The fact is that due to cultural differences, it is difficult for China to even see laundromats, a common product overseas, let alone meet secretly in the store. Just recently, the well-known overseas encryption media Bitcoin Magazine and Cointelegraph Magazine published articles by Daniel Batten and Yohan Yun respectively. Both reported and investigated the Chinese encryption industry. In their descriptions: China has not banned the mining industry. , crypto airdrops are developing rapidly locally, and VPNs and exchanges are the bridge connecting underground crypto. Has the mining industry been banned? In September 2021, China issued the "Notice of the National Development and Reform Commission and Other Departments on Regulating Virtual Currency "Mining" Activities", which clearly prohibits the development of virtual currency "mining" in any name, strictly prohibits new project investment and construction, and accelerates the development of existing projects. The project exits in an orderly manner. After that, a large number of mining companies retreated, setting off a wave of Chinese miners going overseas. At that time, almost all mainstream media, including the New York Times, reported that China had banned virtual currency mining activities. In April this year, Bloomberg once again published an article saying that Chinese mining companies were moving to Southeast Asia.However, the reports of the two crypto media this time are quite different. Both put forward similar views, saying that "China has not banned the mining industry." Bitcoin ESG researcher Daniel Batten believes that the policy is only a ban on new mining, rather than a legislative prohibition. He also explained the implementation of policies in different regions, emphasizing that in underdeveloped areas, policy implementation is not in place and social resources dominate. , so new mining activities have started. The data appear to support this conclusion. From the data point of view, China still accounts for at least 20% of the global hash rate. A chart released by CryptoQuant founder Ki Young Ju in July showed that Chinese mining pools accounted for 54% of the global hash rate. He pointed out: "Although not all participants in these mining pools are Chinese, some mining farms may still be operating secretly in China, but the information will not be made public." Danie conducted a survey on four independent mining organizations operating in China. In interviews with HashX Mining and three other unnamed institutions, all four miners said they were actively encouraged by Chinese authorities to help solve the problem of heat recovery and redundant renewable energy monetization, which means that at certain times To a certain extent, China is allowing a certain number of crypto miners to resume work. But given capital controls, the authorities have only reinstated mining operations that are smaller and based on renewable energy. Taking the mines in Inner Mongolia as an example, a mining machine dealer confirmed, "With the economic downturn, heavy industry has left Inner Mongolia and Xinjiang, resulting in excess power supply." The government will encourage mines to operate here and promote the development of renewable energy to gain profits. Specifically, Inner Mongolia's Bitcoin mining farms usually have only 200-500 mining machines, with a power generation capacity of about 1MW, all using clean energy such as water energy, wind energy or solar energy. The interview also revealed other situations: First, although a large amount of computing power has migrated to other countries (initially the United States, and recently Ethiopia), since China's "ban", a large amount of new computing power has also flowed into China; second, China has not Then proceed to off-grid mining operations. This kind of mining efficiency is too low and easily detectable. It consumes baseload energy and is not in line with the carbon neutrality vision proposed by the authorities. The direct impact of this is that the emission intensity of China's mining industry has significantly reduced after the "ban". Three. Mining mainly relies on hydraulic power and micro-hydraulic power, such as in cities such as Xi'an, Wuhan, Beijing and Xining. The cost of hydropower generation will be very low during the rainy season. It is worth noting that centralized grid-connected mining is becoming increasingly common, and retail mining still exists.Although the high electricity bills paid by individual miners mean that their profitability is low or even at a loss, their primary purpose is to conduct foreign exchange exchange, by transferring money out of China, converting it into ASICs and electricity costs, thereby generating BTC, and ultimately converting into US dollars. Daniel mentioned that due to economic feasibility considerations, local provincial governments usually support gray areas that the central government does not support. He also emphasized that some provincial governments have issued valid "mining licenses" and mining companies can work collaboratively with provincial governments in exchange for the right to use them to recover heat energy. Compared to Daniel who only focused on mining, Cointelegraph’s report focused more on the overall industry, mentioning that mainland crypto users have used other methods to bypass the ban, and airdrops have achieved advanced industrialization. The following are some of its reports: VPN and Exchanges have become media. Lowell, a newly graduated college student who is participating in cryptocurrency full-time, broke the news that social media or cryptocurrency exchanges provide P2P trading channels, and users can purchase cryptocurrency with RMB through bank transfer, WeChat Pay or Alipay. , OKX and Binance are two of the most popular exchanges. As shown in the figure below, Binance offers RMB P2P sales in China. "I have access to these two apps. I use an iPhone and they can be downloaded from app stores in Hong Kong or other countries," Lowell said, adding, "But Apple's mainland app store doesn't have these two apps. Program." Compared with foreign users, application access in China is subject to a stricter Internet environment, and a system called the "Great Firewall" blocks access to many popular domain names such as Google and Facebook. Cointelegraph invited a source in mainland China to test access to cryptocurrency exchanges. Testing confirmed that users cannot access the Binance and OKX websites without using a VPN, but the mobile apps of these exchanges are accessible without a VPN. Some projects such as MakerDAO prohibit users from using VPNs to access the protocol, mainly to avoid prosecution by US regulators rather than Chinese regulators. Zhao Wei was once the CEO of Beijing-based analytics company TokenInsight, and later moved to Singapore to found BitU, a DeFi project.He mentioned that using VPN is almost second nature for mainland Internet users. Zhao Wei said: "If you want to access Google or YouTube...

#CBDC