New Bitcoin (BTC) mining data from the Cambridge Center for Alternative Finance (CCAF) has revealed that China has re-emerged as a leading mining hub.
This resurgence comes after the country banned BTC mining last year, citing BTC’s energy-intensive Proof-of-Work (PoW) consensus mechanism.
According CCAF, China’s ban on BTC mining caused the country’s hash rate to drop to zero in July and August 2021. However, data from September 2021 to January 22 shows that China’s hash rate rose to 30.47 EH/s in September. This resurgence made China the second largest BTC miner, contributing 22.29% of the global hashrate.
Explaining how China has recovered as a leading BTC mining hub, CCAF said:
This strongly suggests that significant underground mining activity has formed in the country, empirically confirming what industry experts have been assuming for a long time. Access to off-grid electricity and geographically dispersed small-scale operations are among the main means used by underground miners to hide their operations from authorities and circumvent prohibition.
However, it is worth noting that this data is based on a research methodology that leverages the aggregate geolocation of massive BTC mining pools, which combine computing resources to effectively mint new tokens.
Additionally, individual BTC miners using virtual private networks (VPNs) to hide their locations further obfuscate this data. However, the researchers said that the use of VPN would have a moderate impact on the accuracy of the analysis.
The United States remains the main mining center for BTC
Following China’s BTC mining ban, companies in the field to turn off operations and began an exodus to other jurisdictions with friendlier regulations and cheap energy. The United States quickly became the main mining center for BTC, ready to host these companies. Recent data from CCAF shows that the US generates 37.84% of the BTC network hashrate, up from 35.40% in September 2021.
Kazakhstan also took in its fair share of the mining companies that left China. The country’s hashrate rose to 27.31 EH/s in October. However, constant power outages and a crackdown on unregistered BTC miners discouraged mining. As a result, the country’s hashrate plummeted to 24.79 EH/s, taking Kazakhstan’s market share to 13.22%.
Canada’s market share also fell from 9.55% in August 2021 to 6.48% in January. Russia recorded a steeper drop in the same period, with its market share falling from 11.23% to 4.66%. While the country is an attractive destination for BTC mining due to the huge energy reserves, its central bank opposed BTC mining, discouraging miners from settling in the country.
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This post China returns to the Bitcoin mining scene
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