Last summer, China ramped up enforcement of strict laws prohibiting crypto, including the country’s vast crypto mining industry. In just a few weeks, the Bitcoin network’s total mining power was cut in half as thousands of Chinese miners unplugged. But less than a year later, Bitcoin’s mining power is hitting new all-time highs — and, surprisingly, data from the University of Cambridge suggests that the world’s second-largest economy is once again a top crypto mining hub. How did this happen? It turns out that circumventing the mining ban is just one of the ways Chinese citizens are using crypto technology and NFTs to resist censorship. Let’s dig in.
* After China’s crackdown, the U.S. has become the number one hub for mining, hosting nearly 40% of global miners. But despite the ban, mining in China has persisted and potentially even rebounded — and still likely accounts for nearly 20% of global mining activity. Because of the permissionless nature of the global Bitcoin network, guerilla miners seem to have found ways to avoid detection — including using off-grid electricity sources like hydropower produced by small dams that aren’t connected to the main grid.
* The Wall Street Journal recently reported that Chinese citizens are using NFTs to circumvent censorship by preserving sensitive info — including “Voices of April,” a vast trove of social posts, videos, and more documenting people’s experiences enduring punishing COVID lockdowns in Shanghai. NFTs can confer ownership of data, but they don’t actually store the data themselves — so activists are turning to decentralized web protocols like Filecoin’s InterPlanetary File System (IPFS), which scatters many copies of a file across a decentralized global server network. If a censor takes down one copy, many others remain available. IPFS can also be used to circumvent China’s “Great Firewall,” helping residents gain access to millions of books, scientific articles, and banned works. (Even if you live in a less restrictive country, it can be a good idea to store a copy of your NFT data using IPFS.)
* Cloudflare, a company that operates some of the world’s most important Internet infrastructure, just announced new tools to make it possible for users to host and serve content on IPFS. IPFS developers also announced a partnership with defense-contracting giant Lockheed Martin to host nodes for the decentralized web on satellites orbiting the earth — allowing rapid space-to-space data transfers, without the need to beam the signal to an earthbound server. Around 2.5 billion gigabytes of highly censorship-resistant data is already hosted on decentralized IPFS servers. That’s the equivalent of tens of thousands of copies of Wikipedia.
* What motivated China’s crypto network ban? As an open-source and decentralized monetary system, Bitcoin is generally seen as a threat to China’s control over many aspects of citizens’ lives — and more specifically because it provides a censorship-resistant alternative to China’s new central-bank-issued digital currency, the digital yuan. The digital yuan has hundreds of millions of users and has already been used for billions of dollars worth of transactions — and unlike Bitcoin it gives Chinese authorities complete visibility into users’ finances.
Why it matters… According to one major ranking of economic freedom, China is all the way down at 158 of 177 measured countries — so it’s not exactly surprising that Chinese officials are opposed to decentralized, censorship-resistant, and borderless crypto networks. But unlike all the centralized “Web2” giants — from YouTube to Wikipedia — that are successfully blocked by China’s Great Firewall, crypto and the decentralized web (also known as “Web3”) are much harder to restrict.
DISCLAIMER: Please be advised that nothing in this video shall be construed to be financial, legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor. All personal opinion is intended for general information purposes only
By Coin Market cap