China is the world’s largest mining hub. But it also has one of the most stringent regulatory frameworks for cryptocurrency mining. In response to these measures, many miners moved operations overseas to locations with more lenient regulations. However, things are looking up again for the industry in China.
In the wake of the People’s Republic of China’s harshest ban on bitcoin mining (BTC) in 2021, Bitcoin’s hash rate plummeted; however, new data suggests that China is quietly resuming production.
One of the world’s leading nations in terms of bitcoin mining came to a sudden halt following the China Bitcoin crackdown, resulting in wild changes in many other nations.
Other leading nations like Russia and the United States, as well as formerly unknown countries like Kazakhstan, have taken up the slack in bitcoin production.
As a result of this move, the makeup of bitcoin production has changed globally, government policies have changed as various places try to attract new capital, and a great number of runoff effects have been triggered.
In spite of the fact that the Bitcoin community showed off the true value of its resilience by how quickly and completely it bounced back from this setback, it turns out that another significant example of Bitcoin’s power and resilience is the fact that China’s manufacturing is quietly picking up again. The Center for Alternative Finance of Cambridge University has published new data published by the Cambridge Digital Assets Programme on May 18, 2022, which shows that although China’s share of bitcoin hash rate dropped from around 70% to effectively zero after the ban, it has recovered to almost 22% today.
Nonetheless, China would once again rank among the world’s top producers of bitcoin if this figure is accurate, albeit with a significant decline from the dominance they held before the ban.
In order to verify the state of the underground bitcoin mining industry in China, we collected data from several prominent mining pools, including Poolin.com, BTC.com, ViaBTC, Foundry, and others.
There has long been an assumption that such a production exists.
“Access to off-grid electricity and geographically dispersed small-scale operations are among the major methods underground miners use to hide their operations from authorities.” Looking only at the hash rate leads to skepticism. What are the chances of the hash rate recovering so dramatically? Is it possible for such infrastructure to exist without being detected by authorities? CDAP hopes that by analyzing the mining pool data, it will be able to confirm that the answer is indeed yes.
However, there is still some uncertainty regarding the validity of the study. In any event, it was this center’s data that initially led to the claim that the Chinese hash rate dropped to zero, despite no lack of individuals and publications claiming that there have always been underground bitcoin mining operations.
In the same vein, not only may miners in these pools fudge their actual locations by using virtual private networks (VPNs) and other proxy services, but they can also tell outright lies that are hard to verify. Since this industry is officially outlawed in China, no miner has any reason to self-report. This is probably why the initial impression was that mining had decreased so dramatically.
It is probably safe to assume, however, that the researchers at Cambridge were acting in good faith to create a faithful map of a very murky industry, and have taken measures to prevent these concerns from ruining the data. On this point, it is important not to lose sight of the forest for the trees: regardless of the size or the capacity of the underground bitcoin mining scene in China, it is a certainty that some percentage of hash rate is generated there. Mining businesses persist despite the efforts of one of the world’s most powerful governments, which imposed a comprehensive ban and continued to raid mining equipment to this very day.
China, like any other country, cannot eradicate the economic vision of a decentralized world, free from government interference. In spite of the illicit hash rate continuing to endure and even growing in strength, one thing is clear: Bitcoin is here to stay.
Via this site.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
