Despite the ban, Chinese miners are still underground mining Bitcoin

According to CCAF, from September 2021 to January 2022, traffic from China accounted for about 20% of the total hash rate. Bitcoin, a unit of measure of algorithmic processing power for transaction verification and mining of new cryptocurrency tokens. The uptrend in mining activity comes after it fell to zero in July 2021, not long after the mining ban was introduced by the Beijing government in May last year.

The CCAF suggested that the sudden recovery of mining traffic from China could be attributed to crypto miners operating underground. The CCAF data “suggests clearly that significant underground mining activity has established in the country. Access to off-grid power along with geographically dispersed small-scale operations are the main means used by miners, to conceal their activities from authorities and circumvent bans. “.

China is back as a major Bitcoin mining hub, despite last year’s total ban Reuters

According to the CCAF, “it takes time to find existing storage facilities or build new non-traceable storage facilities at that mining scale. It is likely that a large portion of Chinese miners quickly adapted to the new circumstances, continuing to operate in secret and concealing their tracks by using foreign proxy services to distract attention and surveillance. close”.

The Chinese Miners also tries to “diversify locations,” according to an industry insider named Bob, who specializes in hosting crypto mining operations in Europe and the US. “Miners in China use virtual private networks (VPNs) and try not to use too much power from a single point. As a result, the power company was not able to detect any strange energy consumption.”

Not only affecting miners, the crypto mining ban last year caused headaches for owners enterprise trying to move expensive, specialized equipment. By the end of 2021, at least 2 million cryptocurrency miners are stranded in Sichuan province because of complicated relocation procedures. The operator is losing potential revenue every day when the dedicated machines are idle, with an estimated profit of 170 yuan (about $26.7) per machine. For large operators, this loss amounts to millions of dollars and can never be recovered.

In November 2021, Chinese cybersecurity company Qihoo 360 reported that underground cryptocurrency mining still seems to exist in the mainland. Qihoo says there are about 109,000 Chinese IP addresses mined on average electronic money are operating every day, mainly located in Guangdong, Jiangsu, Zhejiang and Shandong provinces.

Before the ban, China was the top Bitcoin mining location world. However, the US overtook China, expanding mining capacity to 37.8% Bitcoin hash rate in January 2022, up from 35.1% in June 2021.