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BITCOIN The Untold Backstory Of China’s Crypto Mining Ban


www.thecoinrepublic.com 18 May 2022 20:00, UTC
  
Reading time: ~3 m

  • According to the CBECI. BTC, too, was overjoyed by this development, rising more than 2% in just 24 hours. Despite the fact that Bitcoin has now exceeded the $30k barrier, the king coin still has a long way to go.
  • To be fair, it appears that Bitcoin mining has escaped the ban. China’s underground Bitcoin hashrate increment outperformed Kazakhstan’s, coming in second just to the United States’ 37.8%.
  • Between September 2021 and January 2022, Chinese traffic accounted for roughly 20% of Bitcoin’s overall hashrate. The brief lull caused by the quick recovery in Chinese traffic resulted in miners going underground.

China banned any qualities related to Bitcoin, the world’s largest cryptocurrency, last year. China ordered banks to stop aiding transactions and enforced mining prohibitions in June 2021. According to the Cambridge Bitcoin Electricity Consumption Index, China’s percentage of worldwide Bitcoin mining has practically dropped to zero (CBECI). Consider this: China accounted for over three-quarters of all Bitcoin mining in September 2019.

Buried activities

Despite China’s official bans, data from the Cambridge Bitcoin Electricity shows that China’s underground Bitcoin hashrate reached 22 percent of the world’s total hashrate in January 2022, following a government crackdown in 2021. To be fair, it appears that Bitcoin mining has escaped the ban. China’s underground Bitcoin hashrate increase outpaced Kazakhstan’s, coming in second only to the United States’ 37.8%.

In a statement, the CCAF said: The data strongly suggests that the country has developed extensive underground mining activities. Underground miners use a variety of methods to hide their operations from authorities and avoid the ban, including off-grid electricity and geographically dispersed small-scale operations.

Between September 2021 and January 2022, Chinese traffic accounted for roughly 20% of Bitcoin’s overall hashrate. The brief lull caused by the quick recovery in Chinese traffic resulted in miners going underground.

It’s likely that a significant number of Chinese miners swiftly adapted to the new circumstances and continued to operate undercover, using international proxy services to hide their footprints and avoid detection. By working in the shadows, these miners gained confidence over time.

Through Ashes To the glory

As the ban has taken hold and time has passed, underground miners appear to have gained confidence and are pleased with the protection provided by local proxy providers. This is exactly the case here. Mining operations quickly recovered after demonstrating almost no activity (0 percent) in August 2021, reaching more than 30 percent of the global Bitcoin hashrate. Other places, however, took advantage of the opportunity to welcome the exodus of miners.

Kazakhstan’s network share, for example, surpassed 18 percent in August 2021, according to the CBECI. BTC, too, was overjoyed by this development, rising more than 2% in just 24 hours. Despite the fact that Bitcoin has now exceeded the $30k barrier, the king coin still has a long way to go.

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