Bitcoin mining: Despite the crackdown, China is back as the second-largest miner
- China’s crackdown on Bitcoin trading and mining had reduced the country’s contribution to mining drastically last year.
- However, miners seem to have gone underground instead of stopping or moving.
- China contributes over 20% of the world’s Bitcoin mining power today.
This after it had fallen to zero post the fresh crackdown against Bitcoin mining in August. Data from the new research shows that activity has picked up again and China is now the second-largest Bitcoin miner, after the US.
Cambridge Bitcoin Mining Map
The CBECI is a tracker of global computing power and energy consumed by Bitcoin mining globally. Compiled by the Cambridge Centre for Alternative Finance (CCAF), it provides information on the total amount of electricity and power consumed by Bitcoin miners worldwide.
In 2021, after China began its crackdowns on Bitcoin mining in the country, the tracker showed that its contribution to Bitcoin mining dropped to zero quickly. China went from providing over 80% of the world’s Bitcoin mining computing power to zero by August 2021. However, since then, the country’s contribution seems to be rising again.
According to the updated tracker, China was providing 22.29% of the computing power in September 2021, followed by 18.09% in October, and so on. In January last year, China accounted for over 50% of the computing power going into mining Bitcoin worldwide.
|Month||China’s contribution to Bitcoin mining|
To be sure, China’s contribution to Bitcoin mining has been dropping since the late 2020s, which is when different authorities in China began their crackdowns. In June last year, the country’s contribution had dropped to 34.3%, but it plummeted after April when the People’s Bank of China and other crucial authorities passed anti-crypto rulings.
This led miners to other countries, including the US. For instance, the CBECI had shown that the US became the biggest miner of Bitcoin, along with countries like Kazakhstan and others.
While the US remains at the top, it would seem that all miners didn’t move out of China at the time.
“This strongly suggests that significant underground mining activity has formed in the country, which empirically confirms what industry insiders have long been assuming. Access to off-grid electricity and geographically scattered small-scale operations are among the major means used by underground miners to hide their operations from authorities and circumvent the ban.”
While it’s possible that some mining firms went behind VPNs to hide their location, large miners and crypto exchanges, like Huobi Global, had announced intentions to leave the country in December last year.
“In the past, we had been communicating with regulators to see if there are still ways to legally operate in China. But this time, there’s no room for discussion.” Du Jun, co-founder of Huobi, told Bloomberg at the time. “Our strategy is all about going global now.”
- Towards a Greener Footprint: Prioritising Carbon-Neutrality Makes Good Businesses Sense! Are Indian Firms Making the Transition?
- Netflix confirms an ad supported tier is coming to its streaming service by year end
- Accenture, Cognizant could see revenue growth but a strong US dollar could spoil the party
- Kharif sowing is off to a weak start with extended dry spells and floods
- Best ladder for home use in India