Even though Bitcoin trading and mining are illegal in China, the country remains a Bitcoin mining superpower, reveals a new study. The Cambridge Centre for Alternative Finance (CCAF) prepared and recently released its annual research. In the report, they have presented a virtual globe map of the study. The scientists have published their findings in Cambridge Bitcoin Electricity Consumption Index (CBECI). It provides insight into crypto mining activity in various countries worldwide.
Mainland China’s average monthly hashrate (a measure of the computational power per second used when mining) share is 21.11%. It is second to the United States on the virtual map. The hashrate in Sichuan city is 42.59%, whereas it is 32.25% in Xinjiang. It’s worth mentioning that these two places are at the top of the list. It has even outperformed Georgia (US), which has a hashrate of 30.76%.
What is the reason for China’s Ban on NFTs and Crypto?
China is a significant performer in the new economy around the world. It is continuously working towards technical advancement. Authorities in China have also highlighted the importance of developing blockchain-based apps. They are also focusing on automated processes for digital manufacturing and tech-savvy cities. China’s current growth strategy stresses the promotion of emerging technology.
However, the Chinese authorities have specified that the financial elements of the new digital economy are not welcomed. It includes NFTs and Cryptocurrencies. Because of illegal or invisible economic activities in the country, the government has seen NFTs as a possible concern.
China has struggled to combat underground banks, loan sharking, and shadow banking. NFTs provide the general population with a new way to raise legal or illegal funds. China has also taken a similar stance on cryptocurrencies. They have prohibited the usage of digital currencies in the country. Moreover, Crypto mining activities have faced targets for regulation and bans since then. It has forced some to move outside their home regions or the nation.
Amidst being an illegal business, it showed Swift Recovery
China’s Bitcoin mining activities accounted for roughly 20% of the global hashrate. These stats are based on data between September 2021 and January 2022. In May 2021, the Chinese government announced a ban on Bitcoin mining. Following the ban, the hashrate dropped down to zero by July. But, this was only a brief setback. China now seems to have reclaimed its position as a significant mining player. August 2021’s silence on Bitcoin mining was only the exception. Mainland China’s Bitcoin mining hashrate climbed to 22% in September, whereas the United States led the world with 27.7%.
Chinese Bitcoin miners have overturned the crypto mining ban by going underground. They are now using VPNs (Virtual Private Networks) to sustain their activities. Chinese miners use a VPN and try not to use too much energy from a single spot, so the electrical company cannot detect any strange energy consumption. Moreover, the technique appears to have worked well but these miners now depend on VPNs and other proxies to maintain their operations.
The Chinese high court ruled that Bitcoin has significant economic value. They indicated that there is still interest in digital assets in the country. Meanwhile, China’s IT giants are also interested in non-fungible tokens (NFTs). Furthermore, Bitcoin has activity achieved an all-time high in China.