China Returns to Bitcoin Mining Amid Government Ban

After a government ban on crypto mining activity last year, China has reemerged as the second-largest location for Bitcoin mining.

According to a report released on Tuesday by the Cambridge Centre for Alternative Finance, the US accounted for 37.84 percent of global hashrate, a measure of computing power needed to extract the digital currency, from September 2021 to January. After dropping last year, the hashrate, which is also responsible for protecting the Bitcoin network, has made a strong rebound to new highs.

According to the CCAF, following the mining ban in China last year, the country has seen a boom in activity through “covert mining operations” and has “re-emerged as a major mining hub,” grabbing 21.11 percent of the worldwide hashrate.

“This strongly suggests that significant underground mining activity has formed in the country,” CCAF concluded in the report, “which empirically confirms what industry insiders have long been assuming.” In May 2021, Beijing stepped up its efforts to control the cryptocurrency sector. Covert mining appears to be continuing in China, albeit over virtual private networks that make the computers appear to be in another nation.

While clandestine mining activities may be to blame for the return to mining, CCAF’s methodology, which is based on aggregating geolocation data provided by partner mining pools, is prone to inaccuracies because many miners utilize proxy services like VPNs to mask their identities.

Kazakhstan came in third with 13.22 percent of the worldwide hashrate, followed by Canada with 6.48 percent. According to the survey, Russia accounted for 4.66 percent of the total and has seen bitcoin mining operations reduced abroad.

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