Bitcoin miners are defying the ban on operating in ChinaHas revealed a recent investigation of the University of Cambridge. Despite the fact that the Asian giant has vetoed cryptocurrencies, mining has resurfaced in the country to the point of already placing it as second hub in the world, second only to the United States.
The aforementioned study indicates that China already monopolizes more than 21% of the global installed capacity to mine Bitcoin. This marks the gradual recovery that the activity has had after the strong persecution of the authorities. Let us not forget that between June and September 2021, transactions and mining of crypto assets in Chinese territory were blocked.
Of course, we are talking about levels that do not resemble those that this country knew how to register before the ban. When the blockade of Bitcoin and other cryptocurrencies occurred, China covered 44% of the world’s mining. However, this return has allowed it to displace other important poles such as Kazakhstan, Canada and Russia, which combined do not reach 25% of the current mining capacity.
According to analysts, China’s reappearance in Bitcoin mining has to do with arming a structure that operates clandestinely.
“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 small-scale operations Geographically dispersed, they are among the main means used by underground miners to hide their operations from the authorities and circumvent prohibition. […]
As time has passed since the ban was imposed, it seems that underground miners have become more confident and seem satisfied with the protection offered by local proxy services.”
Cambridge University Research on China’s Resurgence in Bitcoin Mining
China begins to regain its place in Bitcoin mining
The Chinese ban on Bitcoin had a strong impact on the market, but also on a technical and environmental level. According to the researchers, the rate of hashes of the country, which represents its computing power, fell to zero between July and August of last year. Nevertheless, began to recover from Septemberjust as the Chinese government announced the ban on cryptocurrencies.
Since then, the United States has become the main hub Bitcoin mining globally. The North American country currently accounts for around 38% of the installed mining capacity, and everything suggests that it will continue to lead the ranking for a while longer.
The rage to mine Bitcoin in the United States has been seen mainly in states where the primary economic activity is related to energy. Kentucky, for example, historically depends on coal mining, so its electricity rates are very cheap. Also, BTC miners receive tax incentives to settle there.
The truth is China resurfaces in mining of Bitcoin and tries to recover the space it lost due to pressure from its authorities. We’ll see if the clandestine operation pushes Beijing again to look for new methods to detect and stop the activity.