Bitcoin

China Now the Second-Biggest Bitcoin Miner As Activity Returns After Ban

  • china has re-emerged as the second largest bitcoin miner after the us. In the US, despite a ban on crypto activity in Beijing.
  • An increase in covert operations has made it a major mining hub again. He found the Cambridge Center for Alternative Finance.
  • China’s crackdown resulted in a rapid decline in global bitcoin mining, which has now recovered to record highs.

china has returned as a global bitcoin mining power, despite beijing’s crypto crackdown.

an investigation by the cambridge center for alternative finance found an increase in covert mining operations after the ban, meaning the country is now the second largest location in the world for bitcoin mining, behind the united states.

Reading: China comeback bitcoin mining despite government

“in china, following a sudden increase in covert mining operations following the June 2021 government-imposed ban on bitcoin mining, the country has re-emerged as a major mining hub,” ccaf said in his report published on Tuesday.

China was the leading bitcoin miner until its government completely banned mining in October by declaring all cryptocurrency-related business activities in the country illegal.

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But beijing’s efforts to clamp down on bitcoin mining led to a sharp rise in underground activity, the research found.

Chinese bitcoin miners were the source of 21.11% of the global hashrate, the researchers noted in their study from the period between September 2021 and January 2022.

“This strongly suggests that significant underground mining activity has taken place in the country, empirically confirming what industry experts have been assuming for a long time,” the report says.

“Off-grid access to electricity and geographically dispersed small-scale operations are among the main means used by underground miners to hide their operations from authorities and circumvent prohibition.”

In bitcoin mining, high-powered computers solve complex puzzles to mint new coins and protect the network. The hashrate reflects the computational power used by a network of proof-of-work cryptocurrencies, such as bitcoin, to process transactions on a blockchain. it can also reflect how quickly a cryptocurrency miner’s machines complete calculations.

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The Chinese government ban resulted in an immediate decline in total global hashrate, but this was quickly reversed as miners moved abroad, according to the report.

“by the end of 2021, the total network hashrate had almost fully recovered to pre-ban levels,” he said. “the upward trajectory continued in early 2022 and culminated in a new all-time hashrate high.”

The research found that the United States accounted for 37.84% of the hashrate. Russia has seen a substantial drop in its share, from 11.23% in August to 4.66% in January. Kazakhstan became a destination for crypto miners fleeing the Chinese ban, causing the hashrate share to rise to 18.10% in August. but strict rules introduced by his government to counter power shortages reduced his share to 13.22%.

China’s harsh crackdown on cryptocurrency reverberated throughout the industry and gave us the opportunity to break through and become the world’s largest bitcoin miner for the first time.

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