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Bitcoin Mining Appears to Have Survived Ban in China

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Don't miss CoinDesk's Consensus 2022, the must-attend crypto & blockchain festival experience of the year in Austin, TX this June 9-12.

China is once again contributing a significant chunk of the world's bitcoin (BTC) mining operations despite the ban last year, according to the Cambridge Centre for Alternative Finance (CCAF).

From September 2021 to January of this year, China's contribution to the bitcoin mining network was second only to that of the U.S., according to the CCAF's Bitcoin Electricity Consumption Index (CBECI), which maps the mining activity around the world based on the geolocational data reported by partnering pools.

Following the crackdown on bitcoin mining in the country last year, China's share was reduced to 0% in July and August. However, the CCAF's latest data show that the figure was up to 22.29% in September and fluctuated around 20% in October-January.

This suggests that underground mining activity has been underway in China. “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 CCAF said in a statement.

The sudden drop to 0% in July and August followed by a swift increase in the subsequent months suggests mining firms may have been operating covertly and concealing their locations while using foreign proxy services to fend off attention and scrutiny.

Kazakhstan, for example, appeared to be one of the preferred destinations for miners. The Central Asian country's share of the network climbed above 18% in August last year, according to the CBECI.

By September, miners may have become assured that foreign proxy services were having their desired effect and they need not go to such lengths to conceal their operations in China.

Read more: The9 Buys Data Center in Kyrgyzstan to Host 7,500 Antminers

UPDATE (13:30 UTC May 17): Removes link to SCMP.