In recent news, it was announced that China was initiating a crackdown on all bitcoin mining and related activity within its borders. Zhang Nangeng – the CEO of Canaan Creative, one of the largest mining companies in the world that happens to call China home – is now voicing his opposition to the move.
Canaan Creative CEO Speaks Against a Mining Ban
China has had a very up-and-down relationship with bitcoin and digital currencies in recent years. While the country clearly hosts a wide array of digital currency-based companies and enterprises – and earns profit from these companies – it seems like the nation is doing all it can to get in their way. China ultimately banned events like initial coin offerings (ICOs) in the year 2017, claiming that they were fraudulent and led to excess digital crime. A ban on crypto exchanges emerged soon after.
Many firms ultimately left the nation and moved elsewhere so that they could operate in peace, though up to this point, China was still home to many mining operations. This is allegedly one of the big problems that is being faced in the mining sector at this time. China hosts a wide array of bitcoin mining operations, many of which are powered by coal and other standard fossil fuels that allegedly pollute the environment. This has caused many well-known investors – such as Kevin O’Leary of “Shark Tank” fame – to vow against ever buying bitcoin mined in China again.
But for Zhang, the ban on crypto mining is not the way to go, and he is not just worried about Canaan Creative. In a recent interview, he claims to be concerned about the state of China’s economy, as he thinks a bitcoin mining ban will ultimately deliver a harsh blow to the country’s infrastructure.
What Zhang is suggesting is that Beijing – the city behind the mining crackdown – should consider allowing all operations utilizing green energy for their projects to remain in play. He says that these companies are not only contributing to wiser energy usage; they are also establishing jobs for local workers. He comments:
For-profit miners prefer regions with low electricity prices that indicate oversupply, and likely energy waste. Bitcoin miners also help create jobs in impoverished regions and contribute to fiscal coffers.
Zhang also says that the crackdown could not be coming at a worse time considering how far bitcoin has fallen in previous weeks. This has ultimately caused many mining companies to sell their machines and mining equipment at 20 or 30 percent below normal prices, and he is worried that the crackdown could cause further problems for Canaan Creative and its competitors.
Mining Still Needs Time
Just as it took a long time for bitcoin to be recognized by the market, there will also be a (long) process for bitcoin and crypto mining to be recognized by regulators.