China Is Planning to Ban Bitcoin Mining

The government of the People's Republic of China is reportedly considering bringing an end to all crypto mining in the country.

On Tuesday (April 9), Reuters reported that China's National Development and Reform Commission (NDRC) had announced on Monday that it was "seeking public opinions on a revised list of industries it wants to encourage, restrict or eliminate"; this list, which is known as "Guiding Catalogue for the Adjustment of Industrial Structure", has been issued since 2005.

The Guiding Catalogue is "a document supplementary" to the "Interim Regulation on Promoting the Adjustment of Industrial Structure". When it was first issued, it covered "more than 20 industries that include agriculture, water conservancy, coal, power, transportation, information industry, iron and steel, nonferrous metals, petrochemical industry, building materials, machinery, light and textile industries, service industry, environmental and ecological protection, conservation and comprehensive use of resources, and etc," and in total, there were "539 articles in the encouraged category, 190 in the restricted category and 399 in the to-be-eliminated category."

The Reuters report says that the draft version of the Guiding Catalogue has added cryptocurrency mining to the "over 450 activities the NDRC said should be phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment." Apparently, this document "did not stipulate a target date or plan for how to eliminate bitcoin mining, meaning that such activities should be phased out immediately." Until May 7th, it is possible for the public to submit their comments on the proposed changes to the list.

The report also quotes the state-owned Securities Times as saying on Tuesday that this draft list “distinctly reflects the attitude of the country’s industrial policy” toward the crypto industry.

Although the People’s Bank of China (PBoC) banned initial coin offerings (ICOs) in September 2017, until now, crypto mining has been legal, though discouraged due to the huge amount of energy it uses. For example, on 4 January 2018, South China Morning Post (SCMP) reported that, according to its unnamed sources, China aimed to "drive cryptocurrency miners out of business by limiting power consumption" because "Chinese officials are concerned that bitcoin miners are taking advantage of low power prices in some areas and affecting normal electricity use in some cases." More interesting, this article also mentioned that the curbs " will also involve other regulators" such as the NDRC. 

Of course, this move by the Chinese government should come as no surprise to crypto mining companies that still have mining facilities in China. For example, Bloomberg reported earlier today that Bitmain Technologies has already "established mining operations in the U.S. and Canada."

Twitter account cnLedger, which reports on the crypto/blockchain related news in China, said on Monday that over-the-counter (OTC) desks, which have been the "almost only way" to buy cryptocurrency in China via fiat currency since the PBoC's ICO ban, are seeing strong buys for tether (USDT), with Chinese traders/investors first buying USDT and then converting it to other cryptocurrencies such as Bitcoin at spot exchanges of their choice:

 

Featured Image Credit: Photo by "enriquelopezgarre" via Pixabay.com

Tim Draper Explains Why Buffett Is Bashing Bitcoin, CZ Invites Him to Lunch

Siamak Masnavi

On Monday (February 24), legendary American tech investor Tim Draper spoke about why he recently moved most of his investment funds into crypto, why he is still bullish on Bitcoin and confident about his $250 price prediction, and why he thinks billionaire investor Warren Buffett is so critical of Bitcoin.

Draper, a co-founder of venture capital firm Draper Fisher Jurvetson (DFJ) and an early investor in quite a few unicorns, including Hotmail, Skype, Tesla, SpaceX, and Twitter, was being interviewed on CNBC's "Squawk Alley" at a time when U.S. stocks were down (due to concerns about the COVID-19 pandemic) and Bitcoin was trading around $9,700.

Principal anchor Carl Quintanilla started the interview by asking Draper about his thoughts on the valuations of U.S. stocks and whether thery were too frothy.

Draper Replied:

"Actually, I got to admit [that] I have been out of the market for about six months. It felt pretty lofty for me, and I kind of moved most of my stuff to crypto and Bitcoin. I think that's kind of a safe haven now, and I think this correction may end up being more than that, but I think we're in for a kind of an interesting ride."

Quintanilla then wanted to know what pushed Draper out of stocks six months ago.

Draper said:

"Well, it just got very frothy -- the market got too excited and Uber drivers were doing day trading, and you know all the signs were there. So, I think it was time.

"I think it's a good time to be in the private markets -- that's what I do, and so at Draper Associates, we're very happy that we're continuing to be in the private markets, but I think in the public markets. it just got frothy and then there's the fear of socialism.

"I mean, nobody wants socialism. Capitalism may only work 70% of the time, but socialism has never worked in the history of man. So, I don't understand why there's this move, but I think there's some fear there, and I think there's some interesting things coming."

Co-anchor Morgan Brennan then asked Draper where he saw the Bitcoin going from here.

Draper answered:

"I'm still holding to my prediction. I think Bitcoin in 2022, or at the beginning of 2023, will hit $250,000, and that is a big move from where it is here. And I think that the reason is that Bitcoin will be the currency of choice.

Right now, you have this choice, and Bitcoin is not as easy to move around, but eventually it will be, and then you'll have a choice, and you'll say 'hey do I want to pay the banks 2.5 to 4 percent every time I swipe my credit card or do I want a currency that's frictionless, open, transparent, global, and not tied to any political force?'.

"At some point people are going to make that switch and Bitcoin is going to be the big winner."

Another co-anchor, Jon Fortt, wanted to know how much of Draper's money was invested in Bitcoin, but Draper did want to give him a specific number, and he just said "a lot of it." 

He then added:

"I think the world is going to be much better off because [of] this decentralized movement, and it's not just Bitcoin.

Bitcoin is decentralized currency, but it's decentralized everything, and I think that the some of the politicians are clinging to the past and clinging to their tribalism, but most of the best politicians are moving toward this new world that's global and open and transparent.

I think that's going to be the new world. I think it'll be a more beautiful, more loving, and more peaceful world, but you're going to see a lot of tension on the way to getting to that world."

Draper was also asked by Quintanilla to comment on Warren Buffett's interview on the same program earlier in the day, when he said that cryptocurrencies have "no value" and "don't produce anything" and that people who invest in them are essentially believers in The Greater Fool Theory. Buffett also said in the same interview that he would never own any crypto (even though TRON Foundation CEO Justin Sun has claimed that during a recent dinner, he gave Buffett as gifts two Samsung Galaxy Fold phones containing Bitcoin and a few other cryptocurrencies).

Draper had this to say:

"That is hilarious. 50% of his holdings are banks and insurance companies. They're not gonna do well in this new decentralized economy.

Of course, he is not going to like it. He sees a huge threat to his holdings -- his holdings are more than 50 percent in banks and insurance companies [at Berkshire Hathaway]."

After seeing this interview, Binance Co-Founder and CEO Changpeng Zhao (aka "CZ") went on Twitter to compliment Draper on his excellent understanding of crypto, and invited him to lunch so that they could have a chance to speak on this topic:

Last month, Draper was asked during an interview on FOX Business to give his "best advice" to millennials when it comes to investing for retirement.

He offered this advice:

"Go Bitcoin, go decentralized, start building your empire in the new model that doesn't require that you to have to pay two and a half to four percent every time you swipe your credit card to some bank or another and doesn't require all the heavy regulations we have that are all tied to the dollar... I think if you really want it to work, I think you go Bitcoin or crypto or the new way... I would focus on the future..."