The rise of cryptocurrency in China is a modern-day digital gold rush—one that began not on Wall Street, but in dimly lit internet cafes and humble "game farming" studios. What started as a side hustle for young gamers evolved into a revolution that minted millionaires and reshaped financial frontiers. This is the story of the original players who stumbled into Bitcoin mining almost by accident—and ended up rewriting their destinies.
The Birth of a Digital Gold Rush
“Even today, at least half of China’s mining tycoons probably started as game farmers,” says Lao Lu, an early Bitcoin participant who witnessed the transformation firsthand.
Back in 2010, World of Warcraft dominated China’s online gaming scene. A vast underground economy thrived around “game farming”—players grinding for in-game currency and gear to sell for real money. These so-called “gold farmers” operated out of cramped apartments filled with aging PCs, chasing virtual wealth in a very real way.
Then, something new appeared: Bitcoin.
At first, it was just another background task. Install a program, let your PC run overnight, and wake up to freshly mined coins. For game farming studios already equipped with powerful graphics cards, the switch was seamless. While their machines earned gold in Azeroth by day, they quietly mined BTC by night.
👉 Discover how early adopters turned idle computing power into life-changing wealth.
Bitcoin was still obscure. Trading happened on QQ groups and Taobao, with prices hovering around $0.50 per coin. But infrastructure was forming. In 2011, Linke Yang, a resourceful entrepreneur from Wenzhou, launched Bitcoin China, the country’s first major exchange. Though rudimentary—users transferred funds to personal bank accounts held by Yang’s wife and mother-in-law—it filled a critical gap.
Meanwhile, awareness grew thanks to niche tech publications like Computer Newspaper, which published early step-by-step guides on installing Bitcoin wallets and mining software—not as revolutionary finance, but as a tech curiosity.
And then came Jihan Wu.
A passionate advocate and translator of Satoshi Nakamoto’s whitepaper under the alias “QQAgent,” Wu would later co-found Bitmain, one of the most influential companies in blockchain history. But back then, he was just another believer spreading the gospel across forums like 8btc (Babbitt)—the first Chinese Bitcoin media platform, founded by sci-fi writer Changjia (Liu Zhipeng).
These early communities laid the foundation not just for adoption, but for an entire ecosystem.
The Rise of the Crypto Underground
By 2013, everything changed.
The mobile internet boom swept across China. Smartphones exploded in popularity. And somewhere in Beijing’s Zhongguancun—soon to be rebranded as “Startup Street”—a small café called Garage Café became ground zero for a new movement.
When American student Jake Smith paid for coffee with 0.131 BTC, it sparked curiosity. He posted about it on Bitcointalk, inviting others to meet up. Dozens showed up—among them future titans like Dao Heng (Zhao Dong), Li Xiaolai, and Shen Yu (Shenyu).
This wasn’t just a meetup—it was the birth of a subculture.
At the event, Zhang Nangeng (“Pumpkin Zhang”) unveiled his homemade Avalon miner, achieving 70 GHash/s on the BTCGuild pool. The crowd erupted. Someone shouted, “Auction it!”—and the first Chinese-made ASIC miner found its buyer on the spot.
From that moment, mining stopped being a hobby. It became a business.
Li Xiaolai capitalized on the momentum by launching BitFund.PE, one of China’s earliest crypto investment funds. He gathered nearly 200 enthusiasts in Shanghai, preaching the promise of decentralized money. Attendees wore cheap fast-fashion brands, split bills evenly—but their ambitions were anything but modest.
A legendary QQ group called “Peace Hotel” emerged shortly after, named after the cult Hong Kong film where outcasts find refuge in chaos. The metaphor resonated: these were digital rebels building an alternative world.
With prices surging from $10 to over $1,000 by late 2013, fortunes were made overnight.
“One friend said, ‘We’ve got tens of thousands of coins—this is millions!’” Lao Lu recalls. “It felt unreal.”
Mining hardware became the ultimate prize. Whoever controlled the machines controlled the network.
Enter Kao Cai (Fried Cat)—real name Jiang Xinyu—a prodigy admitted to the University of Science and Technology of China at 15. In 2012, inspired by Butterfly Labs’ announcement of ASIC miners, he launched a community-funded project on Bitcointalk to develop his own. He raised thousands of BTC from backers—and delivered returns hundreds of times over when his miners shipped.
It was arguably the first ICO in history, long before the term existed.
Pumpkin Zhang followed closely behind with Avalon, while others scrambled to enter the race: Li Xiaolai, Zhao Dong, Yang Yaorui—all vying to build better hardware.
The era of amateur mining was ending. The industrial age had begun.
Collapse and Disappearance
But empires built on speculation rarely stand long.
On December 5, 2013, China’s central bank issued a warning: Bitcoin was not legal tender. Prices crashed overnight.
Then came the disaster no one saw coming.
In February 2014, Mt.Gox, once handling 80% of global Bitcoin trades, suspended operations. Days later, it declared bankruptcy—750,000 BTC missing. Whether stolen or mismanaged remains debated to this day.
“It was like watching the Industrial and Commercial Bank of China collapse,” said one early investor.
The blow was devastating. Confidence evaporated.
Zhao Dong lost over $150 million due to leveraged positions and mine failures. Li Xiaolai admitted he considered quitting to open a billiards hall. Lao Lu sold low, bought back high—“like regretting not buying property in Beijing,” he admits bitterly.
And then there was Kao Cai.
By 2014, his new miner designs stalled. Regulatory pressure mounted on his mining farm in Huai’an. Then, without warning, he vanished.
No farewell post. No explanation.
“He entered a Southeast Asian country—but never left,” an insider revealed. “He’s alive. Just hiding.”
Others walked away too. One friend invested 60 million RMB into custom chips—only to lose everything. Even Yang Linke sold off most of his holdings.
The bear market lasted two brutal years.
Rebirth: The Age of Giants
Yet from ashes rose giants.
While many fled, others doubled down.
In 2014, Jihan Wu co-founded Bitmain, which would go on to dominate global mining with its Antminer series and control two of the largest pools: AntPool and BTC.com—together commanding over 40% of Bitcoin’s total hash rate.
Pumpkin Zhang continued refining Avalon through Canaan Creative, attempting multiple IPOs before finally listing in 2019.
Blockchain itself gained mainstream attention after Ethereum’s launch in 2015. By 2018, the “Three Amigos” WeChat group—featuring top investors and tech leaders debating blockchain at 3 a.m.—ignited nationwide frenzy.
But insiders like Lao Lu saw through the hype: “Most ‘chain people’ are just trying to make money without holding any real crypto.”
Meanwhile, mining profits soared beyond imagination.
Bernstein Research estimated Bitmain earned $3–4 billion in 2017—more than Nvidia at its peak. Canaan projected $1 billion in revenue and $500 million in profit for 2018 alone.
Wealth transformed identities.
👉 See how mining evolved from hobbyist tinkering to industrial-scale operations.
Some began to believe they were untouchable—gods of a new digital realm.
“I have money,” one magnate mused, “but can anyone take it? It’s just code. Unless the world shuts down, it’s safe.”
But connection faded among old comrades.
Lao Lu tried reaching former allies—no replies. One finally responded via email: “Too many messages on WeChat lately.”
They’d ascended too high to look back.
FAQ: Understanding China’s Crypto Origins
Q: Who were the first Bitcoin miners in China?
A: Many were game farmers—players who earned real money by farming virtual items in online games. Their powerful GPUs made them ideal early adopters of Bitcoin mining.
Q: What role did Garage Café play in crypto history?
A: It hosted one of the first major Bitcoin meetups in China in 2013, bringing together future industry leaders like Li Xiaolai and Zhao Dong—a pivotal moment in community formation.
Q: Why did Kao Cai disappear?
A: Facing technical setbacks and external pressures during the 2014 bear market, he vanished abruptly. Though rumors persist, evidence suggests he may still be alive but living off-grid.
Q: How did Bitmain become so powerful?
A: By focusing on efficient ASIC miners and controlling major mining pools like AntPool and BTC.com, Bitmain secured dominance over Bitcoin’s network infrastructure.
Q: Did Chinese regulators support Bitcoin early on?
A: No—in December 2013, Chinese authorities banned financial institutions from handling Bitcoin transactions, triggering a major market crash.
Q: Is cryptocurrency still active in China today?
A: While trading and mining are heavily restricted now, many pioneers remain influential globally, and blockchain development continues under state-backed initiatives.
👉 Learn how today’s market leaders evolved from grassroots innovators.
Final Reflections
Lao Lu no longer touches crypto. He works in an unrelated field now—calm, successful, detached.
“We were abandoned by the times,” he says slowly, lighting a cigarette. “Then lifted again by them.”
“But never think you’re a god,” he adds. “We’re all just pawns on the board.”
In the world of blockchain, fortune favors not only vision—but timing, luck, and survival instinct.
The story isn’t over.
Because in crypto, every peak carries the seed of its own downfall… and every crash sows the soil for rebirth.