Last year’s ban on Bitcoin mining in China had brought the country’s overall hashrate to virtually zero.
The history of Bitcoin mining in China
After an initial period of fear, Chinese miners slowly started to turn their machines back on, especially in cases where they could easily keep them hidden.
Despite numerous initiatives by the local authorities to try and stop a new proliferation of this activity in the country, recent research has revealed that China has recently returned to being the second-largest country in the world by hashrate.
Who is mining the most in the world alongside China?
The University of Cambridge has updated its Bitcoin Mining Map up to January 2022, from which it is clear that in first place is still the US with 38% of the world’s hashrate, while in second place is China with 21%.
In third place is Kazakhstan with 13%, the main destination Chinese miners during last year’s flight from China.
In fourth is Canada with more than 6%, while in fifth is Russia with almost 5%.
These five countries combined hold about 83% of all the world’s Bitcoin hashrate. They are followed by Germany, Malaysia and Ireland.
How Bitcoin’s hashrate is increasing
It is worth noting that the total hashrate has increased significantly in recent months, so it is possible that this increase, which occurred during a period of sharp decline in BTC’s value, was somehow driven by the return of Chinese miners.
Moreover, according to data from the University of Cambridge, as early as September 2021, the Chinese had already returned to Bitcoin mining in a big way, i.e. only four months after the ban and three months after the closure of virtually all mining farms.
Already by October, the overall hashrate had returned to pre-ban levels, with profitability falling well below April 2021 levels in recent months.
Bitcoin mining profitability has fallen back to November 2020 levels, when Bitcoin’s price was just over $10,000 and the overall hashrate was just over half of what it is today.
So while Chinese miners were initially scared off by the ban and turned off all machines, after a few months they turned them back on and are now back to mining Bitcoin in a big way.
According to information gathered by the University of Cambridge, it appears that Chinese miners are using VPNs to hide their activities from the authorities, although they are unlikely to be able to hide their energy consumption.
Furthermore, their latest report reveals that a “non-trivial” amount of Chinese miners do not actually consider banning to be a big problem.
It is possible that they have moved within the vast country in search of areas where the authorities are less strict about mining, and where the risk of having problems with energy consumption and pollution emissions is lower.
The post Bitcoin Hashrate: china regains second place in mining appeared first on The Cryptonomist.
