- According to a report released by the Cambridge Center for Alternative Finance on Tuesday, China now accounts for 21.11% of global hashrate for Bitcoin mining, behind the U.S. at 37.84%.
- It’s more likely that Chinese miners simply shifted the equipment to more covert operations, away from prying eyes.
The stories of Bitcoin mining’s decline in China have been greatly exaggerated, at least according to a Cambridge Center for Alternative Finance report that shows the practice has come back in full force to levels higher than before Beijing’s crackdown on the practice.
Although the U.S. still holds the crown as the world’s top spot for Bitcoin miners, China, which suffered a slump in Bitcoin mining activity thanks to a countrywide crackdown, is fast catching up and has reemerged as the second-largest base for mining.
According to a report released by the Cambridge Center for Alternative Finance on Tuesday, China now accounts for 21.11% of global hashrate for Bitcoin mining, behind the U.S. at 37.84%.
Hashrate measures the amount of computing power dedicated to securing the blockchain of a cryptocurrency.
China’s resurgence as a hub for Bitcoin mining suggests that highly-publicized moves by miners to decamp to other countries such as Laos, Kazakhstan and the U.S. may have been nothing more than smoke and mirrors.
Instead, it’s more likely that Chinese miners simply shifted the equipment to more covert operations, away from prying eyes.
According to the Cambridge Center for Alternative Finance report,
“This strongly suggests that significant underground mining activity has formed in the country, which empirically confirms what industry insiders have long been assuming.”
Last May, Beijing intensified efforts to crackdown on the cryptocurrency industry, amidst a broad sweep of other economic activities as well, including tech, real estate and afterschool education.
The true extent of Bitcoin mining in China may never be fully known, especially as much of the traffic of Chinese miners is likely routed through virtual private networks that obfuscate the location that mining activity is emanating from.
At its peak in 2018, China accounted for almost 75% of all Bitcoin mining operations, including through the organization of mining pools.
Mining pools allow both hobbyist and professional miners to come together to improve the odds of successfully adding to the blockchain and receiving the block reward, which is typically the cryptocurrency of that particular blockchain being secured.
Chinese mining pools continue to dominate the landscape, even as the U.S. catches up.