Bitcoin (BTC) mining takes off again in China with 21% of the global hashrate
The University of Cambridge has just released a new report regarding Bitcoin (BTC) mining around the world. These new data cover the period from September 2021 to January 2022. During this time, China has again established itself as a “major hub” of the mining industry.
According to the data, the Chinese territory concentrates 21.11% of hashrate, the computing power of the Bitcoin (BTC) network. However, the Chinese government has formally ban Bitcoin mining in May 2021 citing environmental concerns.
Subsequently, the authorities embarked on the hunt for recalcitrant minors cutting off the electricity supply in some provinces, notably in the Sichuan Valley. 90% of the country’s farms came to a halt last summer. For a time, the University of Cambridge no longer detected any minors in China.
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The United States consolidates its position as a mining leader
Despite the ban, China is now the 2nd country in the world with the most hashrate. In first place, we find, unsurprisingly, the United States (37.84%). Following the restrictions in China, many miners migrated their facilities to American soil, notably in Texas (11.22%), Georgia (30.76%) and Kentucky (10.93%). The report points out that “the United States has not only maintained its leading position […] but also outpaced the rest of the world in hash rate growth”.
In 3rd position, we find Kazakhstan (13.22%) followed by Canada (6.48%) and Russia (4.66%). Before the bans enacted by Beijing, China accounted for 44% of the computing power of the Bitcoin network. In 2019, the hashrate based on Chinese farms even reached a record level of 75% before stabilizing around 55%.
A clandestine mining industry operates in China
Cambridge University researchers attribute the resurgence of miners in China to “underground industry”. According to the report, it is likely that the mining farms have continued to operate on Chinese territory taking precautions. The British researchers explain:
“Access to off-grid sources of electricity and a geographical scattering of small-scale operators are among the main means of circumventing the ban”.
To protect themselves from the authorities, the miners probably relied on “virtual private networks (VPN) or other proxy services”. These tools made it possible to hide their location. That is why countries like Germany or Irelandwhich are home to many VPN servers, have started to climb in the results of the Cambridge Bitcoin Electricity Consumption Index (CBECI).
Launched in 2019, this index quickly established itself as one of the benchmarks in the sector. To provide an estimate of the energy consumption of the Bitcoin network in real time, the researchers rely in particular on the location data provided by several pools. The researchers assume that the IP address of a mining farm is a reliable indicator and that the sample of pools is representative of the entire industry.
If many cryptocurrency miners start to hide their location, the relevance of the index may be called into question. The researchers also attribute the “brutality of resurgence” from farms in China to “methodological compromises”. Concretely, all the mining infrastructure had not really left Chinese territory following the restrictions. De facto, at least some of the miners from China are not listed by the index, because it is possible to hide their IP address. It is therefore possible that more farms are still operating on Chinese soil.
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Source: University of Cambridge
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