The story of Bitcoin's early days in China is not one of Wall Street tycoons or Silicon Valley visionaries. It begins in a far more humble setting: the dimly glow of computer screens in internet cafes, where a group of young gamers, known as "gold farmers," spent their days grinding for virtual currency in massively multiplayer online games.
By night, they ran a different kind of software on those same powerful computers. They were mining a new, obscure digital token called Bitcoin. To them, it was just another way to monetize their hardware—a side hustle that earned a few extra dollars a night. They couldn't have imagined that this obscure digital asset would ignite a financial revolution and turn many of them into millionaires and billionaires.
This is the story of how China's first Bitcoin circle was born from the world of online gaming, and how its earliest participants rode a wave of unbelievable volatility to unimaginable wealth.
The Accidental Miners: From Gold Farming to Bitcoin
In 2010, the most popular MMORPG in China was World of Warcraft, and beneath its surface existed a robust ecosystem of "gold farming" studios. These operations employed gamers to collect in-game currency and items or level up characters for wealthier players who lacked the time to grind themselves.
"It was the happiest job—getting paid to play games," recalls Lao Lu, one of these early pioneers who asked to be identified by his nickname. "We earned a living doing what we loved."
Sometime in mid-2010, whispers of something called "Bitcoin" began circulating through their online communities. The concept was simple: you installed a program on your computer, and it would run automatically, generating these digital coins overnight.
"For us, it was perfect," says Lao Lu. "We farmed game gold by day and ran the Bitcoin software by night. Double the income." The powerful graphics cards in their gaming rigs, essential for running demanding titles, turned out to be perfectly suited for this new form of digital mining.
Initially, these coins had minimal value, traded on QQ groups for 2-3 yuan each (approximately $0.30-$0.45 at the time). A single computer might generate about 10 yuan worth of Bitcoin overnight—not life-changing money, but a worthwhile side income for these young gamers.
They had unknowingly become China's first Bitcoin miners.
The Infrastructure Builds: Exchanges, Media, and Community
As the number of Chinese miners grew, so did the need for infrastructure. The first trades happened haphazardly on Taobao (China's eBay equivalent) and in QQ chat groups. But the model was inefficient and lacked security.
The opportunity was spotted by Yang Linke, an entrepreneurial-minded sauna equipment businessman from Wenzhou. In 2011, after hearing about Bitcoin from a programmer friend, he asked the most pertinent question: "Can we make money from this?"
Convinced by the answer, he invested tens of thousands of yuan to co-found BTCChina, the country's first proper Bitcoin exchange. At its peak, it handled 80% of all Bitcoin trading volume in China. The early system was remarkably rudimentary; users recharged their accounts by transferring money via online banking to two personal bank accounts held by Yang's wife and mother-in-law.
Parallel to the exchange, the first Chinese-language Bitcoin media platform was emerging. Liu Zhipeng, a government geological engineer writing science fiction under the pen name "Long Baji" (a type of long sword), grew disillusioned with his career. He discovered Bitcoin and, fascinated by its potential, co-founded Babite (8BTC) in 2011.
Babite became a crucial hub for Chinese-language information, translating news and technical documents about Bitcoin. One prolific contributor, known online as "QQAgent," translated the original Bitcoin whitepaper by Satoshi Nakamoto into Chinese, finally allowing a wider audience to understand the protocol's foundational principles. This translator would later become famous under his real name: Jihan Wu.
The Boom and the "Jianghu" (江湖) Era
The year 2013 was a watershed moment. The price of Bitcoin began a historic climb from around $10 to over $1,000 by November. Smartphone adoption exploded, 4G licenses were issued, and mobile internet took off. In Beijing, a café in the now-famous Zhongguancun district, known as Garage Coffee, became the unlikely epicenter of China's Bitcoin scene.
An impromptu meetup of thirty-plus enthusiasts, including future crypto titans like "Shenyu," Zhao Dong, and Li Xiaolai, was organized there by an American student. The atmosphere was electric. A demonstration of a new mining rig, the Avalon, manufactured by an enigmatic figure known as "Pumpkin Zhang" (Zhang Nangeng), brought the crowd to a fever pitch.
This was where Bitcoin's Western libertarian ethos began blending with a distinctly Eastern "Jianghu" spirit—a term referring to the romanticized world of martial artists, outlaws, and brotherhoods in Chinese folklore. A powerful sense of community and shared destiny emerged among these early adopters.
Li Xiaolai, who would later proclaim himself "China's Bitcoin richest man," held his own rally in Shanghai that summer. It was a gathering of the "diao si" (a self-deprecating term for underdogs)—people who had stumbled into this opportunity. "Everyone was just a regular person," Lao Lu remembers. "They wore clothes from Semir and Metersbonwe, and we all split the bill equally."
The massive price appreciation transformed the community. The early miners, who had accumulated thousands of coins when they were virtually worthless, suddenly found themselves holding fortunes. The pursuit of profit intensified, and the race to build better mining hardware began in earnest.
The most legendary figure of this era was "Fried Cat" (Jiang Xinyu), a prodigy who entered the University of Science and Technology of China at just 15 years old. In 2012, he conducted what is now considered China's first Initial Coin Offering (ICO), raising funds from the community to develop and manufacture ASIC miners. Early investors in his venture saw returns of thousands of times their initial investment.
Pumpkin Zhang, with his Avalon miners, and Jihan Wu, who co-founded the mining giant Bitmain, joined the fray. The mining hardware industry was born, and it was incredibly lucrative. 👉 Explore advanced mining strategies
The Brutal Winter: Crashes and Disappearances
The euphoria was short-lived. On December 5, 2013, China's central bank, along with four other ministries, issued a notice clearly stating that Bitcoin was not a currency and forbidding financial institutions from handling Bitcoin transactions. The price plummeted.
This was merely the prelude to a greater disaster. In February 2014, Mt. Gox, the world's largest Bitcoin exchange based in Tokyo, suddenly suspended trading. It soon announced that 850,000 Bitcoins (worth around $450 million at the time) had been lost, likely stolen, and the company filed for bankruptcy.
"The collapse of Mt. Gox was like the Industrial and Commercial Bank of China (ICBC) going bankrupt. Can you imagine it?" commented one early investor. The event triggered a severe loss of confidence and a two-year-long bear market that crushed the "Bitcoin faith" many had professed.
Zhao Dong, a key figure from Garage Coffee, lost over 150 million yuan ($24 million) in leveraged trading and failed mining farm ventures. Even Li Xiaolai reportedly considered cashing out his Bitcoin to open a billiards hall. Many, including Lao Lu, sold significant portions of their holdings at the bottom, only to watch the price eventually recover.
The most enduring mystery of this period is the disappearance of Fried Cat. In early 2015, amid technical difficulties with his new miner and pressure from his mining operations, he vanished without a trace. Theories abound—that he absconded with funds, met with foul play, or simply chose to disappear. Sources suggest he may have entered a Southeast Asian country but never left, though his fate remains unknown.
The long bear market washed out the speculators and the unprepared. The community fractured, and the early idealism seemed to fade. The faith had been tested and found wanting.
The Unlikely Resurrection and New Era
Those who held on, or even doubled down during the winter, were rewarded beyond their wildest dreams. The underlying technology of Bitcoin, blockchain, gained mainstream attention around 2016. Ethereum, proposed by Vitalik Buterin in 2013 and launched in 2015, offered new possibilities like smart contracts, creating an entire new ecosystem of tokens and projects.
The "blockchain, not Bitcoin" narrative took hold in some circles, but the real money was still in the infrastructure of the original crypto economy. The companies that had survived the crash—Bitmain, Canaan Creative (Pumpkin Zhang's company)—became behemoths.
Analysts from Bernstein estimated that Bitmain's operating profit in 2017 was a staggering $3-4 billion, on par with established tech giant Nvidia. Canaan Creative reportedly projected profits of 5 billion yuan ($790 million) for 2018.
The wealth created was astronomical and, for some, psychologically transformative. "He feels like he is a god now," said one investment veteran after meeting a crypto billionaire in Japan. "When one person can make tens of millions in a single day, you have to wonder if their worldview becomes distorted."
The original "diao si" in their Metersbonwe t-shirts were now billionaires, revered as prophets of a new financial order. Many of the old guard, like Lao Lu, found the new scene unrecognizable and chose to step away.
Frequently Asked Questions
Who were the very first people in China to mine Bitcoin?
The earliest miners were often involved in "gold farming" for online games like World of Warcraft. They used their powerful gaming computers to mine Bitcoin at night as a secondary income stream, initially valuing it for its immediate, albeit small, monetary return rather than its long-term potential.
What was the first Bitcoin exchange in China?
The first Chinese Bitcoin exchange was BTCChina, founded in 2011 by Yang Linke, a businessman from Wenzhou. It started as a very basic platform where users transferred money to personal bank accounts to buy and sell Bitcoin.
What happened to the famous miner "Fried Cat" (Jiang Xinyu)?
Fried Cat, a brilliant young developer who conducted an early and successful mining hardware ICO, mysteriously disappeared in early 2015. His whereabouts remain unknown, with theories ranging from him absconding with funds to starting a new life anonymously after business pressures mounted.
How did the 2013 Chinese government policy affect Bitcoin?
In December 2013, the Chinese government issued a notice clarifying that Bitcoin was not a currency and restricting financial institutions from dealing with it. This caused a significant immediate price drop and contributed to a prolonged bear market, shaking the faith of many early investors.
Who are the most successful companies to emerge from China's Bitcoin scene?
The biggest success stories are in mining hardware manufacturing. Bitmain, co-founded by Jihan Wu, and Canaan Creative, founded by "Pumpkin Zhang" (Zhang Nangeng), grew to dominate the global market for Bitcoin mining ASICs, generating billions of dollars in profit during bull markets.
Is the original "Bitcoin faith" still alive among these pioneers?
For many of the earliest pioneers, the extreme volatility and immense wealth creation transformed the narrative from one of ideological "faith" to one of unprecedented financial opportunity. Some remain true believers, while others view their success as a story of being "unbelievably lucky."
The Final Word: A Lesson in Humility
The journey of China's first Bitcoin players is a classic tale of accidental fortune. It highlights how a technological innovation can be discovered on the fringes of society by unlikely participants who are simply looking for a better way to leverage their skills and tools.
Their story is also a profound lesson in market cycles, hype, and humility. Many who felt like gods at the peak of a bull market were humbled by the ensuing crash. Those who survived learned that in the world of crypto, today's peak can easily become tomorrow's valley.
Lao Lu, who has since left the crypto world for a different industry, summarizes the experience with a dose of philosophical clarity: "We were once abandoned by the times, and then the times pushed us to another高潮 (gāocháo - climax/peak). Never think you are a god. Everyone is just a chess piece, a leaf boat in the stream."
The story is far from over. The crypto landscape continues to evolve at a breakneck pace, creating new fortunes and legends. But the origins of this digital gold rush, rooted in the gaming cafes of China, remain one of its most compelling and human chapters.