China banned Bitcoin mining last May. Exactly one year later, the country reappeared as the place of predilection for mining operations.
A new study revealed underground mining activity in the country had catapulted it to second place globally in terms of installed mining capacity.
The appearance of China's return.
Cambridge Centre for Alternative Finance (CCAF) reported the surprising resurgence and added that China currently dominates with a 21.11% market share just behind the US with 27.69%. On the other hand, countries that were previously seen as stronger Bitcoin mining centers, like Kazakhstan, Canada and Russia, are far behind with 13.22%, 6.48%, and 4.66%, respectively.
The reported mining hash rate for the entire country effectively went to zero during the months of July and August, according to the Cambridge Bitcoin electricity consumption index (cbeci).
The next month, the reported hash rate suddenly rose to 30.47 h/s. according to the study, this trend has demonstrated that significant underground mining activity has taken place in canada, which "confirms what the initiates of the industry have long taken on. ”
The CCAF stated,
“Access to off-grid electricity and geographically scattered, small-scale operations are among the major means used by underground miners to hide their operations from authorities and circumvent the ban.”
The rapid upturn in mining activity in China can be attributed to miners hiding their location by leveraging virtual private networks (VPNs) or other proxy services. The study also argued that over time, Chinese underground miners have become more confident in the protection offered by local surrogate services to cover their tracks.
Change in Bitcoin's mining landscape.
The global landscape of bitcoin mining has changed significantly since the ban on China. Canada, for its part, continued to strengthen as a leader by a large margin. However, other countries, with the exception of Canada, which has experienced only moderate growth, are not yet favorable destinations for minors.
Russia's share of the relative hash rate declined dramatically from 11.23% in August 2021 to 4.66% in January 2022. During the same period, the country also saw a substantial decline in terms of total installed mining capacity contribution from 13.56 EH/s to 8.74 EH/s.
Kazakhstan, once considered an attractive country for Chinese Bitcoin miners, saw its market share decline due by 13.22%, partly due to power shortages and political pressure. Its governement earlier imposed stricter rules for mining companies and also increased tax burdens on miners.