In May 2021, China introduced a ban on cryptocurrency mining, calling it an “extremely hazardous” industry, affecting efforts to limit carbon emissions. However, according to recent research, China failed to implement its cryptocurrency prohibition last year, and the country has since resurfaced as one of the world’s main Bitcoin (BTC) mining hubs.
After China banned cryptocurrencies in 2021, a major exodus of miners occurred to the United States, Kazakhstan, and other locations. However, new data from the Cambridge Centre for Alternative Finance (CCAF) demonstrates that Chinese miners did not vanish; many continue to operate, although in secret.
Today, China has emerged as the world’s second-largest Bitcoin mining hub. Although China appeared to have contributed zero percent of Bitcoin’s total hashrate last July, two months after a mining ban went into effect, however, in the next month, the index suddenly increased again to 30.47 EH/s – proof shows that miners have begun to return to China, confirming what industry insiders have long predicted.
The industry quickly roared back to life from September 2021 to January 2022, when China constituted approximately 20% of the total hashrate, referring to the computational power per second produced by the Bitcoin network in the previous 24 hours.
CCAF reported China’s amazing hashrate resurgence and added that the country currently dominates with a 21.11% market share, just behind the US with 37.84%. On the other hand, countries previously considered Bitcoin mining hubs, such as Kazakhstan, Canada, and Russia, are lagging far behind with 13.22%, 6.48% and 4.66%, respectively.
The new data, according to Cambridge Bitcoin Electricity Consumption Index (CBECI) project leader Alexander Neumueller, is sufficient to prove that Bitcoin mining is still active in China.
The rapid recovery in Chinese mining activity can be attributed to miners concealing their location by leveraging virtual private networks (VPNs) or other Proxy services. The study also argues that as time has passed, Chinese Bitcoin miners have become more confident with the protection of local authorized services in covering their tracks.
The global Bitcoin mining landscape has changed dramatically after China’s ban. For its part, the US continues to assert itself as the leading country with a wide spread of activities in many different states. However, other countries, except Canada, which has seen only moderate growth, have yet to prove to be the ideal destination for miners.
Kazakhstan, the world’s third-largest BTC mining center, sees a modest reduction in hash rate share, according to the latest CBECI data. Kazakhstan’s contribution to the BTC hashrate fell from 18 percent in August to 13.22% in January.
Russia saw a 35% drop in hashrate, from 13.56 EH/s (11.23%) in August 2021 to 8.74 EH/s (4.66%) in January 2022.
Kazakhstan, once considered territory for Chinese Bitcoin miners, has seen its market share decline by 13.22%, partly due to power shortages and political pressure. The country’s authorities had previously imposed strict rules and also increased the tax burden on miners.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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