Pictures of “Technical Preplan on Blocking Bitcoin overseas Transaction” were circulated in Wechat group and later posted on weibo around 18pm 16 September. The document describes the preplan of blocking bitcoin exchanges and Bitcoin blockchain data-syncing, along with a list of overseas exchanges. The news caused panic sell, a daily low of 16,661 was observed on OKCoin around that time. Chinese Bitcoin community is vulnerable after the “exchange ban”. Could things get worse like shutting down mining pool in China?
Although the screenshots or pictures cannot be verified without a reliable source, a report on Sina confirmed the authenticity, citing support from “insiders”.
Technical Preplan for blocking Bitcoin overseas transaction
The technical measures that should be deployed by 30 September include:
1. Block accesses to overseas exchanges such as Coinbase, bitfinex, localbitcoins on main egress router, including web access, app access, and API access interfaces.
2. Block access to the Bitcoin seeding nodes on the primary exit router,
3. Through DPI recognition, discard Bitcoin blockchain synching data on main firewall.
The Bitcoin exchanges mentioned in the document include: Coinbase, Okex, Okcoin, Bithumb, Bittrex, coinone, bitflyer, bitstamp, bitstar, bitfinex, Poloniex, kraken, bitmex, localbitcoins.
Meanwhile, to prevent nodes from synching data through VPN, mining pools in China (Appendix 4) will be closely monitored and
“Contact local communication administration authority to cut off internet access of mining pool if necessary. “
The “Appendix 4” is missing but the strong-arm of authority is not to be doubted. In the past,
According to a document released by XJEIC (the Economic and Information Commission of Xinjiang Uyghur Autonomous Region) on 19th July, the authority asked subsidiaries to “take caution on supporting Bitcoin mining enterprises”. The 2-page document points out that Bitcoin mining is not cloud computing center. Mining farm has no economic contributions locally other than “consumption of lots of power”.
“Take caution on supporting Bitcoin mining enterprises”released by XJEIC
The document also suggests that the renting fee of such mining farm should be collected once a month and other premium policy like taxation cut are not applicable for such business.
“Local government or enterprises is suggested not to get involved
According to forum post on 8btc, Bitmain planned to build huge data center in Xinjiang. But the plan was delayed by bad weather, according to chatlog by Jiang Zhuo’er.
The news may be FUD, but Haipo Yang, CEO of Viabtc, expressed his concern:
Technically, China can’t ban bitcoin traffic, we have our own sync network. But if China gov say mining is illegal, we are fucked.
Mining pools business is not considered illegal at the moment, and BTCChina reiterates that the BTCC mining pool service continue after the trading closure on 30 September. We have observed a turn of regulatory attitude towards Bitcoin and other cryptocurrencies. As 5 out of top 6 bitcoin mining pools are situated in China, it would be a disaster if internet connection of these mining pools were taken offline.
Bitcoin network saw a 19.58% difficulty increase at blockheight 485,856 yesterday.
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