What is Bitcoin mining?

Bitcoin mining is the process of using specialized computer hardware (ASICs) to validate transactions and secure the Bitcoin network. Miners compete to solve cryptographic puzzles using the SHA-256 algorithm, and successful miners receive block rewards in Bitcoin. As of 2024, the block reward is 3.125 BTC following the April 2024 halving.

What is an ASIC miner?

ASIC (Application-Specific Integrated Circuit) miners are specialized hardware designed specifically for Bitcoin mining. They are significantly more efficient than general-purpose computers for performing the SHA-256 hash calculations required for mining. Major manufacturers include Bitmain (Antminer) and MicroBT (Whatsminer).

How does Bitcoin mining difficulty work?

Bitcoin's mining difficulty automatically adjusts every 2016 blocks (approximately every 2 weeks) to maintain an average block time of 10 minutes. If more miners join the network and blocks are found faster, difficulty increases. If miners leave and blocks slow down, difficulty decreases.

What is a mining pool?

A mining pool is a group of miners who combine their computing power (hash rate) to increase the probability of finding blocks. When the pool successfully mines a block, the rewards are distributed among participants based on their contributed hash power. Common payment methods include PPS (Pay Per Share), PPLNS (Pay Per Last N Shares), and FPPS (Full Pay Per Share).

What is hash rate in Bitcoin mining?

Hash rate measures the computational power used in mining, typically expressed in terahashes per second (TH/s) or exahashes per second (EH/s) for the entire network. Higher hash rates increase the probability of finding valid blocks. Modern ASIC miners can achieve hash rates of 100+ TH/s.

What is the current Bitcoin block reward?

As of 2024, the Bitcoin block reward is 3.125 BTC per block, following the halving event in April 2024. Bitcoin undergoes a halving approximately every 4 years (every 210,000 blocks), reducing the block reward by 50%. The next halving is expected around 2028, when the reward will decrease to 1.5625 BTC.

How is mining profitability calculated?

Mining profitability depends on several factors: hash rate (TH/s), power consumption (watts), electricity cost ($/kWh), Bitcoin price, and network difficulty. The key metric is efficiency, measured in Joules per Terahash (J/TH). Lower J/TH means more efficient mining. Profitability = (Hash Rate × Hash Price) - (Power Consumption × Electricity Cost).

Bitcoin Mining Laws in China

Overall status: Banned. Cryptocurrency mining and trading remain comprehensively banned. The 2021 PBoC/NDRC notice continues; 2025-26 enforcement increased criminal penalties for industrial-scale mining. Some underground hashrate persists, primarily in remote western provinces.

Legal Status — Banned

Cryptocurrency mining and trading remain comprehensively banned. The 2021 PBoC/NDRC notice continues; 2025-26 enforcement increased criminal penalties for industrial-scale mining. Some underground hashrate persists, primarily in remote western provinces.

Updated 2026-01-29

Licensing — Banned

No licensing pathway exists. Mining is on the NDRC 'eliminated industries' list and treated as illegal financial activity.

Updated 2026-01-15

Taxation — Banned

No tax framework — mining income is illegal proceeds subject to confiscation.

Updated 2026-01-15

Environmental — Banned

Cited as a primary justification for the ban under China's dual-carbon goals.

Updated 2026-01-15

Energy — Banned

Power utilities ordered to identify and disconnect mining loads; differential industrial-power tariffs apply to suspected sites.

Updated 2026-01-15

Import/Export — Restricted

Domestic ASIC manufacturing (Bitmain, MicroBT, Canaan) continues — mostly for export. Domestic resale or operation is illegal.

Updated 2026-01-15

Banking — Banned

Banks and PSPs prohibited from providing services to crypto-related entities; cross-border settlement crackdowns intensified in 2025-26.

Updated 2026-01-15

Tax Treatment

Not applicable — proceeds are subject to confiscation under illegal-financial-activity rules.

Key Regulations

PBoC/NDRC Notice on Crypto Mining (Sept 2021)
NDRC 'eliminated industries' catalogue listing crypto mining
Supreme People's Court 2025 interpretation on illegal crypto operations
Differential power tariffs targeting suspected mining loads

Compliance

Mainland China: do not operate. Penalties include asset seizure and imprisonment.
For Hong Kong SAR operations follow the SFC VATP licensing regime separately.

Frequently Asked Questions

Is Bitcoin mining legal in China?

Banned. Cryptocurrency mining and trading remain comprehensively banned. The 2021 PBoC/NDRC notice continues; 2025-26 enforcement increased criminal penalties for industrial-scale mining. Some underground hashrate persists, primarily in remote western provinces.

What licenses are required to mine Bitcoin in China?

No licensing pathway exists. Mining is on the NDRC 'eliminated industries' list and treated as illegal financial activity.

How is Bitcoin mining taxed in China?

No tax framework — mining income is illegal proceeds subject to confiscation.

What energy regulations affect Bitcoin mining in China?

Power utilities ordered to identify and disconnect mining loads; differential industrial-power tariffs apply to suspected sites.

Are there environmental rules for Bitcoin mining in China?

Cited as a primary justification for the ban under China's dual-carbon goals.

Can banks serve Bitcoin miners in China?

Banks and PSPs prohibited from providing services to crypto-related entities; cross-border settlement crackdowns intensified in 2025-26.

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