December 21, 2021
China cracked down on its domestic crypto mining industry in May, but many miners have figured out ways to continue operations and evade detection, according to CNBC.
Experts estimate that as much as 20% of the worldwide bitcoin network remains in China.
As hydropower dams dry up in the provinces of Sichuan and Yunnan, miners are newly contemplating taking their operations overseas.
Although Beijing exiled its crypto miners in May and then doubled down on its mining ban in September and again in November, multiple sources tell CNBC that as much as 20% of all the world’s bitcoin miners remain in China.
This is well off its peak of around 65% to 75% of the global market, but it is substantially more than an official estimate from Cambridge University that puts China’s current share at 0%.
Data from Chinese cybersecurity company Qihoo 360 shows that underground crypto mining appears to be alive and well in China. In a November report, the research group estimated that there are an average of 109,000 active crypto mining IP addresses in China on a daily basis. Most of those addresses, according to the report, are in the provinces of Guangdong, Jiangsu, Zhejiang, and Shandong.
Crypto mining has survived in China, in part, because a lot of miners weren’t sure whether Beijing was actually serious about the ban.
China has repeatedly lashed out against digital currencies, but each time, the sting wore off, and the rules eventually softened. The country’s announcement this spring that it would be cracking down on crypto mining dovetailed with the centennial of the founding of the Chinese Communist Party, a time when there was pressure on lawmakers to show strength.
Some miners – especially smaller-scale operators who didn’t have the resources or the connections to migrate abroad – figured a lot of the crypto talk by the government was bravado, so they powered down, laid low for a few weeks, and then came back online, taking a few extra precautions when they did.