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Despite ban, China surges back to second place on bitcoin mining charts
Miners behind the Great Firewall may never have downed tools, say Cambridge crypto-boffins
China has become the world’s second most prolific miner of bitcoin – or maybe it always was – according to new data from the Cambridge Centre for Alternative Finance (CCAF).
The Centre on Tuesday announced its latest hashrate data analysing activity from September 2021 to January 2022 and found the USA is home to 37.84 percent of mining capacity, ahead of China at 21.11 percent, Kazakhstan ‘s 13.22 percent and Canada’s 6.48 percent.
Chinese miners continued operating covertly while hiding their tracks
The CCAF says the ban appears to have been effective as hashrates – the metric of how quickly systems can complete the proof of work required to produce a Bitcoin – dropped to zero before returning to 30.47 Exahashes per second (EH/s) zero in September. Peak global capacity of 248.11 EH/s was reached in February 2022, when US capacity hit 70.97 EH/s.
While China’s ban did see a marked dip in global mining activity, the Cambridge boffins speculate that Chinese miners may have defied Beijing and continued to mint digital currencies.
“It is probable that a non-trivial share of Chinese miners quickly adapted to the new circumstances and continued operating covertly while hiding their tracks using foreign proxy services to deflect attention and scrutiny,” the Centre speculated. “As the ban has set in and time has passed, it appears that underground miners have grown more confident and seem content with the protection offered by local proxy services.”
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Another nation that saw increased confidence was Kazakhstan, which surged to over 18 percent of global capacity in the months after China’s ban. Sadly, local electricity shortages and a week-long internet outage have since made the central Asian nation a less attractive place to mine crypto.
Russia’s also receded in importance. Chinese miners are thought to have initially felt Putin’s pariah was nicely close to home, and a market with plentiful energy supplies to fuel their needs. But Moscow is also clamping down on Crypto, so activity quickly fell.
The CCAF derives its data from what it describes as “collaboration with partnering mining pools BTC.com, Poolin, ViaBTC, and Foundry.” ®