China Bans Bitcoin

China has banned Bitcoin more times than most people can count.

2013: Chinese banks were prohibited from handling Bitcoin transactions. Price dropped. Bitcoin survived.

2017: Initial coin offerings were banned, exchanges were shut down. Price crashed 40%. Bitcoin survived.

2019: Bitcoin mining and trading were added to a list of industries to be eliminated. Bitcoin survived.

2021: The most comprehensive ban yet — mining was outlawed entirely, financial institutions were prohibited from offering crypto services, and trading platforms were shut down. Bitcoin’s hash rate — the computing power securing the network — dropped by 50% almost overnight as miners went offline or relocated.

Bitcoin survived. The hash rate recovered within months as miners moved to Kazakhstan, the United States, Canada, and elsewhere. The network didn’t skip a single block.

This is one of the most important demonstrations of Bitcoin’s resilience. China at its peak hosted over 65% of Bitcoin’s mining capacity. Losing that in a matter of weeks would have been fatal to almost any other network.

Bitcoin’s difficulty adjustment — the mechanism that automatically recalibrates how hard it is to mine a new block — absorbed the loss and kept the network running within its ten-minute target.

No CEO made a decision. No board held an emergency meeting. The code adjusted automatically, as designed.

China’s repeated attempts to kill Bitcoin have produced one consistent result: proof that it cannot be killed by any single government, regardless of how powerful.

Tomorrow: the 2017 bull run — when Bitcoin went truly mainstream.

— The Daily Bit