New Data Shows China Still Controls 21% Of The Global Bitcoin Mining Hashrate
18 May 2022 - 6:00PM
NEWSBTC
China is back with a vengeance. The Cambridge Centre for
Alternative Finance, or CCAF, collected data “spanning the period
from September 2021 to January 2022” for their latest study. The
headline is that, ban or no ban, the Asian country controls 21% of
the Global Bitcoin mining hashrate. Since June 2021, here in
NewsBTC, we’ve been wracking our brains trying to figure out why
did China ban bitcoin mining. Maybe we were barking at the wrong
tree the whole time. According to the CCAF’s numbers,
unsurprisingly the “US has remained at the forefront of Bitcoin
mining and extended its leading position (37.84%).” For their part,
“China has re-emerged as a major mining hub (21.11%). Kazakhstan
(13.22%), Canada (6.48%), and Russia (4.66%) have been relegated to
more distant places.” Let’s see what else can we learn from the
CCAF’s numbers. Is China All The Way Back? How Did This
Happen? As it turns out, the CCAF analysis uncovered numbers
that “strongly suggest that significant underground mining activity
has formed in the country”. Can we be sure that the explanation is
real? And if it is, how did the underground China bitcoin mining
industry surge so fast? “Following the government ban in June 2021,
reported hashrate for the entire country effectively plummeted to
zero during the months of July and August. Yet reported hashrate
suddenly surged back to 30.47 EH/s in September 2021, instantly
catapulting China to second place globally in terms of installed
mining capacity (22.29% of total market).” The report wonders what
happened, “a comeback of this magnitude within the period of one
month would seem unlikely given physical constraints, as it takes
time to find existing or build new non-traceable hosting facilities
at that scale”. And theorizes that maybe the underground miners
were using VPNs to hide their location and then, suddenly, decided
that they were safe enough to stop hiding. Which seems unlikely.
BTC price chart for 05/18/2022 on Bitfinex | Source: BTC/USD on
TradingView.com Non-China Countries Sadly but predictably, the
study also found out that “the hashrate recovery has not been
distributed evenly”. How did the non-China countries in the Top 5
do in the studied period? The United States “surpassed the rest of
the world in terms of hashrate growth. This is evidenced by
installed capacity surging from 42.74 EH/s (35.40%) in August 2021
to 70.97 EH/s (37.84%) in January 2022.” In Kazakhstan, for their
part, “Total hashrate continued to increase in September and peaked
at 27.31 EH/s in October, until repeated power outages towards the
end of last year, and a week-long internet shutdown earlier this
year, forced miners to temporarily suspend operations.”
Surprisingly, “Russia on the other hand not only experienced a
substantial drop in relative hashrate share from 11.23% in August
2021 to 4.66% in January 2022, but also a significant decline in
total installed mining capacity contribution from 13.56 EH/s to
8.74 EH/s over the same period.” Last but not least, “Canada
experienced only a moderate increase in its hashrate from 11.54
EH/s in August 2021 to 12.15 EH/s in January 2022, which resulted
in a loss in market share from 9.55% to 6.48% as total network
hashrate was growing significantly faster. ” The CCAF Spreads FUD
Of course, the Cambridge Centre for Alternative Finance couldn’t
pass the opportunity to spread some unfounded rumors about bitcoin
mining. This is what the CCAF said: “These geographic shifts
in mining activities bring to the fore how relocations impact the
overall sustainability of the network. For instance, recent
research has suggested that the Chinese decision to ban Bitcoin
mining has indeed worsened – rather than improved – Bitcoin’s
environmental footprint.” The CCAF is using this study’s findings,
which basically says that they NOW believe what bitcoiners always
said. That China was mostly using hydropower energy for bitcoin
mining, and not coal. The fact is, as far as using green energy,
bitcoin mining continues to be the cleanest industry in the
world. Whenever we find intentional FUD spreading like this
one right here, we have to check out who paid for the study. As it
turns out, the numbers come directly from the Cambridge Digital
Assets Programme. The CCAF host the CDAP “in collaboration with 16
prominent public and private institutions”. Among them, we find the
International Monetary Fund (IMF), Mastercard, Visa, and the World
Bank. And right then, everything made sense. Featured Image by
PublicDomainPictures from Pixabay | Chart by TradingView
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