China is coming back strong. The Cambridge Center for Alternative Finance, or CCAF, collected data “for the period September 2021 to January 2022” for: their latest study† The headline is that, ban or not, the Asian country controls 21% of the global Bitcoin mining hashrate. Since June 2021, here at NewsBTC, we’ve been racking our brains to find out why China banned bitcoin mining?† Maybe we’ve been barking at the wrong tree the whole time.
According to CCAF-FCVI figures, it is not surprising that “the United States remained at the forefront of bitcoin mining and expanded its leadership position (37.84%).” For their part: “China has again become an important mining center (21.11%). Kazakhstan (13.22%), Canada (6.48%) and Russia (4.66%) were exiled to more distant places. Let’s see what else we can learn from the CCAF-FCVI numbers.
Is China back? How did this happen?
It turns out that the CCAF-FCVI analysis revealed figures that “strongly suggest that significant underground mining activities have formed in the country”. Can we be sure that the statement is real? And if so, how has China’s underground bitcoin mining industry grown so quickly?
“After the government’s ban in June 2021, the hashrate reported for the entire country fell to zero during the months of July and August. Yet the reported hashrate suddenly jumped to 30.47 PE/s in September 2021, immediately catapulting China into second place in the world in terms of installed mining capacity (22.29% of the total market). †
The report wonders what happened: “a return of this magnitude in a month seems unlikely given the physical constraints, as it takes time to find existing untraceable accommodation facilities or build new ones on this scale” . The theory goes that the illegal miners used VPNs to hide their location and suddenly decided they were safe enough to stop hiding. Which seems unlikely.
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Unfortunately, but not surprisingly, the study also found that “the hash rate recovery was not evenly distributed.” How did the non-Chinese Top 5 countries behave?
- The United States outperformed the rest of the world in hashrate growth. This is evidenced by the installed capacity, which increased from 42.74 PE/s (35.40%) in August 2021 to 70.97 PE/s (37.84%) in January 2022”.
- In Kazakhstan, for its part, total throughput continued to increase in September, peaking at 27.31 pe in October, until repeated power cuts towards the end of the year last year and an internet outage a week earlier this year forced miners to shut down operations. to be temporarily suspended. †
- Surprisingly, on the other hand, Russia saw not only a substantial decrease in its relative hashrate share from 11.23% in August 2021 to 4.66% in January 2022, but also a significant decrease in the total installed mining capacity contribution of 13.56 PE/ s to 8.74 PE/s over the same period. †
- In conclusion, “Canada only saw its hashrate rise moderately, from 11.54 PE/s in August 2021 to 12.15 PE/s in January 2022, resulting in a market share loss of 9.55% to 6.48% as the total network hash rate increased much faster. †
The CCAF-FCVI is divisive
Of course, the Cambridge Center for Alternative Finance couldn’t pass up the opportunity to spread baseless rumors about bitcoin mining. This is what the CCAF said:
“These geographic shifts in mining operations emphasize the impact of relocations on the overall sustainability of the network. For example, recent research has suggested that China’s decision to ban bitcoin mining has actually worsened — rather than improved — bitcoin’s environmental footprint. †
The CCAF-FCVI uses the results of this studywho basically say they believe NOW what bitcoiners have always said. That China mainly used hydropower for bitcoin mining, not coal. The thing is, when it comes to using green energy, bitcoin mining still is the cleanest industry in the world†
Whenever we find an intentional distribution of FUD like this, we need to check who paid for the research. Turns out the numbers come straight from the Cambridge Digital Assets program. The CCAF-FCVI organizes the CDAP “in partnership with 16 leading public and private institutions”. Among them are the International Monetary Fund (IMF), Mastercard, Visa and the World Bank.
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