Bitcoin OG Zhu Yu: Why can’t cryptocurrency mining be further liberalized?

Author: Bitcoin OG Zhu Yu

Recently, various rumors about the liberalization of mining have begun to spread again. As a long-term practitioner in this field, I certainly hope that the industry can recover, but mining can only return to the state before May 21, and it is impossible to liberalize it.

What was the state before 21? In fact, it was just that the telecommunications level and the economic and information level did not monitor you specifically. As long as the local government wants to ban you, there are still many tools.

(For the sake of the local (county) economy, local units such as the Development and Reform Commission can still turn a blind eye after 21 years. Only telecom companies from other places reporting you remotely are hard restrictions (really annoying).)

Why can't it be further liberalized? Even fully liberalized? Because the government is not only worried about this matter, there are many more important things that the government guards against day and night.

First, if you allow free withdrawal of coins after mining, wouldn’t it mean that funds can flee abroad at will? All the blockades over the years have been in vain. To solve this problem, there must be a matching exchange (controlled by a state-owned enterprise). Only by establishing an exchange in China and cooperating with domestic mining pools, and not allowing miners to withdraw coins mined on the chain, and miners cashing out and paying taxes in domestic exchanges, can we continue to maintain the strength of foreign exchange control and actually receive taxes from miners.

(Or we can supervise global mining pools, implement different withdrawal rules for miners in different regions, and not allow coins mined in China to be withdrawn on the chain. But we do little of this kind of long-arm and delicate work, and many times it conflicts with the rules set by the United States, which is difficult and unwilling to do.)

After foreign exchange control and taxation, another problem faced by state-owned exchanges and state-owned mining pools is that after the country leaves, it may never be able to ban this industry again. Has this government really understood this matter? Can it make such a decision? Many times we cannot always stand in the perspective of old drivers. We know these things well enough, but the government does not know them well enough. They will not be so reckless.