China Offers $25,000 Prize in Crypto Miner Identification Contest
The clampdown on cryptocurrency mining has been a major subject in China since the middle of 2021. Different approaches have been employed by the government authorities to clear out cryptocurrency mining activities from the region. The reasons for the clampdown include the quest for financial supervision by eliminating the use of Bitcoin and other cryptocurrencies from within the region and the pursuit of carbon neutrality by the government.
The latest approach employed by the Chinese government is an unconventional promise of a price of $25,000 to the winner of a crypto miner identification contest. This is a new introduction to the Digital China Innovation Contest, held annually since 2019. This year’s event which is held in Fuzhou includes an algorithm-based solution that could pinpoint crypto mining activities, even when they are hidden.
The digital contest runs from January to April 2022 in Fuzhou, the capital of Fujian Province in East China. Altogether, there are 10 “racing tracks” in the competition, with the crypto miner identification contest posing as one of them, an innovative one for that matter.
The particular racing track for this contest involves Big Data. The process requires contestants to examine electricity data provided by the electricity committee. They are to critically analyze such data and make a submission to the committee. The contestants are expected to identify crypto mining activities, the report of which shall be included in their submission.
According to the committee, the inclusion of this exercise in this year’s contest is deliberate. Its goal is to enable them to identify cryptocurrency miners that are still operating in China, albeit secretly. These miners are said to be having a negative impact on the nation’s carbon neutrality targets and also disrupting business operations. This they do by heavily occupying the computing resources available to the public.
The original ban on cryptocurrency mining and other crypto-related activities in 2021 led to the closure of more than 90% of all crypto-related businesses within the region. In a report, the People’s Bank of China (PBoC) claimed that China’s global share in Bitcoin trading fell to as low as 10% as a result of this ban from an original dominance of 90%. This is one of the areas where the ban and subsequent clampdown have impacted the crypto industry.
The focus on cryptocurrency mining in China since this period has been intense. In October 2021, the PBoC added cryptocurrency mining to the “negative list”, prohibiting any form of investment in the industry. This led to a massive exodus of mining companies that were originally resident in China, with many of them moving to more friendly jurisdictions in other parts of the world. Those that stayed back were forced to go into hiding, of which the government has continued to intensify efforts in fishing them out.
Apart from the PBoC, the National Development and Reform Commission (NDRC) also added cryptocurrency mining to its industrial blacklist. All hands are on deck, especially from the government and the regulators to bring an end to crypto mining activities in China. This is motivated by China’s target to achieve carbon neutrality by the year 2060.
As China pushes away cryptocurrency miners, other parts of the world are taking the leadership position in the industry, especially regions where the miners operate using clean energy. New York and Texas are noted to have experienced an increase in crypto mining activities since the Chinese clampdown began. Even the mayor of Miami openly welcomes fleeing crypto miners from China to his city.