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China's Bitcoin Mining Activity Sees Major Resurgence Despite Ban, Shows Data

China's Bitcoin Mining Activity Sees Major Resurgence Despite Ban, Shows Data

Traffic from China contributed to around 20 percent of Bitcoin’s overall hash rate from September last year to January.

By Shomik Sen Bhattacharjee | Updated: 17 May 2022 18:24 IST

China's Bitcoin Mining Activity Sees Major Resurgence Despite Ban, Shows Data

Photo Credit: Unsplash/ Executium

China has returned as second Bitcoin mining hub despite the recent crypto ban

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Highlights

The US still leads the world in Bitcoin mining activity
Chinese miners have largely moved underground with their operations
Bitcoin mining numbers in China had fallen mid 2021

China is back again as a key center for Bitcoin mining, despite the country outright banning the activity one year ago. The Cambridge Bitcoin Electricity Consumption Index (CBECI) provided by the Cambridge Centre for Alternative Finance (CCAF) shows that Chinese Bitcoin mining activities have rebounded, and it's currently the second-largest in the world — contributing to 21.1 percent of the overall global BTC hash rate, right behind the US which holds 37.8 percent of the total hash rate.

As per statistics, mining activity in China made a swift recovery last year. After exhibiting almost no activity from China in August, the following month it was back up to 22.3 percent of the Bitcoin hash rate, coming in just behind the United States, which was at 27.7 percent.

The Cambridge Bitcoin Electricity Consumption Index (CBECI) is something that the CCAF puts out on a regular basis and is compiled using the geolocational data supplied by partnering mining pools.

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The CCAF notes in a statement that the data "strongly suggest that significant underground mining activity has formed in the country. 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."

According to CCAF, the momentary slowdown may have been caused by miners moving underground, given the sudden rebound in Chinese traffic.

China has long been the world's largest Bitcoin mining nation, with the native BTC hash fee energy accounting for more than 75 percent of the global power demand in 2019. The hash price subsequently plummeted to 0 percent in July and August 2021, owing to the closure of the crypto mining farms throughout China by the government.

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Globally, the Bitcoin network's aggregated computing power has been on a rise. Last June, the worldwide aggregate compute capacity stood at 57.47 exahashes per second (EH/s), however it hit an all-time high of 248.11 EH/s in February, according to CCAF.

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