In spite of the trading and mining of Bitcoin being illegal in China, the country continues to be a Bitcoin mining powerhouse, according to recent research. The Cambridge Centre for Alternative Finance (CCAF) conducted annual research and presented a virtual global map. The scientists periodically publish their results in the Cambridge Bitcoin Electricity Consumption Index (CBECI), which provides an understanding as to the level of activity of miners in certain countries.
On the virtual map, Mainland China’s average monthly hashrate share is 21.11%, which is second only to the U.S. in the world. Sichuan city has a massive hashrate of 42.59%, while Xinjiang records 32.25%. It’s worth noting that these two cities are leaders among the top locations, even outrunning the state of Georgia (U.S.), which has a hashrate of 30.76%.
Swift Recovery Despite Being an Illicit Business
From September 2021 to January 2022, China’s Bitcoin mining efforts rounded out to approximately 20% of the world’s overall hashrate. The ruling to prohibit Bitcoin mining in the country came in May of last year, after which the hashrate rapidly declined, before even hitting zero. But it seems this was only a temporary setback, as now China now appears to have resumed its place as a key player in the mining industry.
New Bitcoin mining data up to January 2022
China miners still make up 21% of hashrate despite the ban. USA increased from 35 > 37%.
Malaysian share decreased from 5% > 2.8%. From fifth to seventh place.
Malaysian miners produce RM133 million worth of BTC per month. pic.twitter.com/7fn046yiw9
— Adam Mashrique (@sakak_musdom) May 17, 2022
A silent August 2021 was only an exception, rather than the new rule. Mainland China’s Bitcoin mining hashrate swiftly skyrocketed back up to 22% in September, while the United States led the world at 27.7%.
It seems that Chinese Bitcoin miners have managed to bypass the crypto mining ban by moving underground, are actively using VPNs (virtual private networks) to continue their crypto mining operations.
One business insiders, who wished to remain anonymous and will henceforth be referred to as “Bob”, said: “Chinese miners use a VPN and try not to use too much energy from a single spot, so the electrical company cannot detect any strange energy consumption.” It looks as though the strategy worked out just fine, and now these miners rely on VPNs and other proxy services to keep operations running.
Bitcoin Recognized as a Valuable Property
Just a recently, news surfaced that one of China’s High Courts acknowledged the economic value of 1 BTC. The case involved a loan which was paid out as 1 BTC, and a ruling was made in favor of the plaintiff, who must be compensated in relation to the market value of Bitcoin.