23/05/2022
Highlight
- New research from the Cambridge Centre for Alternative Finance (CCAF) indicates that the global Bitcoin Hashrate is becoming increasingly distributed geographically among mining groups worldwide.
- Bitcoin mining is still taking place in China despite the government’s crackdown and declaration that Bitcoin is illegal. China’s share of Hashrate has risen to the world’s second-largest, behind only the United States.
After the Chinese government banned Bitcoin mining in 2021, mining operations in China began shutting down rapidly in July 2021. However, a new study by the Cambridge Centre for Alternative Finance found that China accounted for 34.3% of global Hashrate in June 2021, before its share fell to 0.0% in July of the same year after the government announced the ban on Bitcoin mining. New data released in early May this year found that China’s mining share, which had stood at 0.0% in August, had risen to 22.3% in September of the previous year. This was the world’s second-largest share, behind the United States at 27.69%.
The researchers explained that the study was based on data collected through CCAF’s collaboration with Mining Pool companies. The data was used to identify the geographic locations of mining groups worldwide based on IP addresses. However, the researchers noted that the data may contain inaccuracies. CCAF stated:
“There is no certainty regarding the geographic locations of Bitcoin mining operations. The use of virtual private networks (VPNs) or proxy services to conceal IP addresses or obscure the location may distort the sample and result in the Hashrate of certain countries being overestimated or underestimated.”
Nevertheless, data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) showed that China’s Hashrate fell to zero in July and August 2021. There are two possible explanations for the subsequent return of mining activity:
- A large-scale and sudden return to mining may have occurred despite the government’s ban.
- Miners may have continued mining Bitcoin after July and August of the previous year while concealing the locations of their mining operations.
The image shows the share of Bitcoin mining Hashrate by country.
CCAF also stated that following China’s ban on Bitcoin mining, Kazakhstan became the primary destination for relocated mining operations. It now has the world’s third-largest mining share at 13.2%, followed by Canada in fourth place at 6.5%. It will be important to monitor how China’s share of Bitcoin mining develops despite the government ban. China is not the only country to have banned mining; Kazakhstan and Iran have also imposed bans on Bitcoin mining.
Source
https://www.coindesk.com/layer2/2022/05/22/china-cant-seem-to-stop-bitcoin-mining/
https://forkast.news/china-banned-bitcoin-mining-became-no-2-bitcoin-miner/
https://fortune.com/2022/05/17/china-bitcoin-mining-surge-despite-ban/
https://www.theblockcrypto.com/post/147162/new-data-suggest-many-china-based-bitcoin-miners-may-have-moved-underground-after-the-ban