China always follows the same pattern when disruptive technology from the West takes over the world. The general public must realize that this ban on Bitcoin is not surprising. Every time a new disruptive technology takes over the Western world, Beijing ends up banning it to create a national competitor that it will promote at all costs among its population. The goal is always the same: to better control the Chinese people.
BY Sylvain Saurel for In Bitcoin We Trust
Since Xi Jinping came to power in March 2013, it became clear to everyone that China’s goal was to become the world’s leading superpower in the future. Beijing has been doing everything since then to give itself a chance to overthrow America’s stranglehold on the world.
To achieve this goal, Xi Jinping has strengthened the grip of the president of the People’s Republic of China on the country.
Xi Jinping has made a great cleanup of potential opponents to his power. He even managed to get himself appointed “president for life” of China. With such a president, censorship in China has continued to increase. The Chinese authorities have succeeded in setting up a mass surveillance system that is chilling with the Chinese social credit system.
China’s ban on Bitcoin is a double opportunity for the network
The digital yuan is the last missing piece in this system. Beijing is making great strides in this project of a digital currency issued by its central bank. The project is already in advanced testing in several major Chinese cities.
To make sure that the Chinese people use this digital yuan, Beijing issued a reminder in early May 2021. Bitcoin and cryptocurrencies are banned in the country. This has always been the case for several years, but now Beijing will be adamant about enforcing the ban.
As a result, mining companies have been ordered to stop their activities immediately. This resulted in a significant drop in the Hash Rate of the Bitcoin network, which led to a Bitcoin price crash in May 2021.
Since then, all companies have organized, and we are witnessing a great exodus of Bitcoin mining from China to the West. China’s ban on Bitcoin is a double opportunity for the network:
- This will improve the decentralization of the Bitcoin Hash Rate around the world.
- The share of electricity from renewable energy sources for Bitcoin mining is rising sharply, already exceeding 50% at the latest estimates given by the Bitcoin Mining Council.
So for the future of Bitcoin, this is all extremely Bullish.
China always follows the same pattern when a disruptive technology from the West takes over the world
Coming back to Beijing’s attitude, the general public must realize that this ban on Bitcoin is not surprising. It follows a pattern that Beijing has frequently used since the early 2000s.
Every time a new disruptive technology takes over the Western world, Beijing ends up banning it to create a national competitor that it will promote at all costs among its population. The goal is always the same: to better control the Chinese people.
The social network Facebook was for example blocked in 2009 to favor the Chinese competitor Weibo. The search engine Google was banned from China in 2010 to favor the emergence of Baidu among the Chinese. Youtube was then banned in 2012 in favor of the Chinese service Youku. The instant messaging service WhatsApp was banned in 2017 in favor of WeChat.
I’ll stop here but you can find an exhaustive list on Wikipedia:
Everything that promotes freedom must be banned so that the Chinese authorities keep total control over the population
Beijing’s attitude is therefore clear. All Western services that promote freedom of expression and that cannot be controlled by the Chinese authorities must be banned from the territory.
At the same time, Beijing favors national tech champions that are more easily controlled if they do not obey Xi Jinping’s wishes.
Seeing Beijing ban Bitcoin is therefore something totally logical.
Bitcoin is synonymous with freedom. Bitcoin promotes values that are the opposite of what the Chinese government wants for its people. Beijing does not want its people to be able to live their lives on their own terms. The idea is rather to force every citizen to follow the guidelines imposed by the Chinese Communist Party.
In this sense, it is essential to push the digital yuan to the Chinese people.
The more Chinese citizens use the digital yuan, the better it will be for the Chinese authorities who will be able to censor even better those citizens who try to express opinions that differ from the government’s guidelines.
If the banning of Bitcoin is sad news, it is only for the Chinese people who are losing access to a currency that could have given them a greater weapon of resistance to censorship. For Bitcoin itself, this will not change much.
The success of Bitcoin is clearly inevitable, and its adoption will continue elsewhere in the world, with or without China.
To end on a humorous note, you should also keep in mind that the Chinese authorities even banned Winnie the Pooh in 2018 due to the comparisons some people were making with Xi Jinping :
This ban is totally ridiculous, but it reminds you of just how much control the Chinese government has over the people in China.
Despite this ban, Winnie the Pooh has continued to do well, just as Bitcoin will. So there is no need to worry too much about the long term.