FUD is short for Fear, Uncertainty and Doubt.
China was very influential in Bitcoin. How did China get Bitcoin business in the first place?
Let’s explore a bit of Bitcoin history.
It all started with its founder Satoshi Nakamoto. It is a pseudo name but it sounds like Japanese, doesn't it?
Bitcoin in Japan
Japan adopted Bitcoin way earlier than anyone in the world. It became the Crypto Hub as early as 2010 and their citizens were among the first to mine and use Bitcoin.
Mt. Gox Exchange
Mt. Gox was founded in 2010 and slowly became the biggest Bitcoin exchange platform in the world that handled 70% of Bitcoin transactions around the world!
It got shut down in 2014 with the worst hacking that lost $473 Million dollars at that time (roughly more than $1 Billion dollars nowadays).
Investors were shocked by then and cyber attacks continued until 2018 that Japan lost its Crypto Hub title by China.
Japan Crypto Adoption
Despite all previous horrible experiences, Japan's crypto adoption is leading around the world. Bitcoin exchange was legalized in 2017.
China’ role of Bitcoin
If you think Bitcoin is a statement of financial freedom, how ironic that Bitcoin survives in one of the most controlled financial markets in the world. China became a leading Bitcoin mining power in 2018 because of the company called Bitmain.
Bitmain, the power house of Bitcoin mining
It is probably not a coincidence that China became the Bitcoin mining hub because it was projected to become the global manufacturing house. After 2014 Bitcoin crashed, Bitmain was founded and it not only mining Bitcoin but also selling mining equipment for profits.
By the end of 2017, Bitmain became a huge mining power that was estimated to contribute 28.9% of mining power in the global mining hashrate.
Despite all Chinese government regulations warning to ban Bitcoin, it managed itself to demoniated on Bitcoin mining power in September 2019 with a total of 75.53% global hashrate conditions.
Talking about China FUD, shutting down China Bitcoin mining is shutting down 75.53% energy supplies! It is really a problem.
China’s love and hate of Bitcoin
After 2009 Bitcoin was introduced, not many people are aware of Bitcoin and it is too fairy-tale for most people. Digital money and the Central Bank's out of control to print money sound very far away. The Internet was just about to take off but people doubted at the time.
Chinese government was doubting too. However, they love the Blockchain idea that automatically keeps track of each transaction that helps increase the manufacturing productivity. It is possible to integrate into their control system in a broad way so that the government can operate more efficiently.
Its narrative about shutting down Bitcoin was more like a warning that asked to not think about replacement of the Central Bank but continue exploring the Blockchain idea.
Since 2013, Chinese regulators have announced that they will shut down any illegal Bitcoin mining to keep their financial system under control. However, regulators seemed to do nothing about such warnings.
What the government did was to prohibit Bitcoin transactions within the financial system.
However, it got more and more serious from years to years, yet the Bitcoin mining industry kept booming until 2020 pandemic hits.
China’s furious about Bitcoin by issuing their version of Bitcoin - CBDC
China FUD was a myth in the past. People in crypto will usually buy the dip because every time when it was announced, the market was red.
It was not until in March of 2021, the Bitcoin was hitting its record high at around $63K and suddenly China announced to ban Bitcoin mining. This time was unlike any previous time before, it was serious. Bitcoin miners were exodus and forced out of the country to seek new hubs. They shipped their equipment through packages as fast as they could.
It triggered the hashrate shortage from the peak of 2019 around 75.53% down to 46.04% within a month and it caused mining difficulty to 4.81% at new low as China announced its crashing down on Bitcoin mining.
Then China’s hashrate kept slowing down to around 26% in the current rate as the miners completed their migration out of the country and mining difficulties recovered.
Chinese government, on the other hand, issued their CBDC, which is convenient for everyone that has a blockchain, wallet and everything that you can with Bitcoin without wasting mining energy, a perfect solution for the future.
The problem is CBDC is controlled by the government.
Has China done with Bitcoin?
In my opinion, China has contributed lots in mining energy in the past 7 years and it pushed mining innovation into the next level. Although its political environment has changed, the mining of Bitcoin has not yet completely died out.
It will continue utilizing blockchain and other crypto technology to help the crypto universe to grow. China FUD may become history but its legacy will continue to flourish and help other countries to adopt the Bitcoin mining industry into the next level.
Photo credit: https://igaming.org/crypto/chinas-state-council-calling-for-a-crack-down-on-bitcoin-mining-and-trading/
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Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational