China has returned with avengeance. The Cambridge Centre for Alternative Finance, or CCAF, collected data “spanning the period from September 2021 to January 2022” for The most recent research. According to the headline, ban or not, 21% of global Bitcoin mining activity is controlled by Asia. Since June 2021, here in NewsBTC, we’ve been wracking our brains trying to figure out why did China ban bitcoin mining. Maybe it was because we kept looking at the wrong tree all the 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.
What is China’s history all the way back? What is the Secret to This?
As it turns out, the CCAF analysis uncovered numbers that “strongly suggest that significant underground mining activity has formed in the country”. Are we sure this explanation is true? Is it possible to be certain that the explanation is true? And, if so, why did underground China’s bitcoin mining boom so rapidly?
“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”. It is possible that the underground miners used VPNs in order to hide where they are located and suddenly decided it was safe enough to go public. This seems highly unlikely.
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Non-China Countries
Sadly but predictably, the study also found out that “the hashrate recovery has not been distributed evenly”. What did non-China nations do during the study 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. ”
FUD is spread by the CCAF
Of course, the Cambridge Centre for Alternative Finance couldn’t pass the opportunity to spread some unfounded rumors about bitcoin mining. The CCAF stated the following:
“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 makes use of this study’s findingsThis basically means that the bitcoiners now believe everything they have always believed. China used mainly hydropower to mine bitcoins, not coal. It is true that bitcoin mining still uses green energy. The cleanest sector in the entire world.
We need to verify who funded the study whenever we see intentional FUD like this. The numbers are directly from Cambridge Digital Assets Programme, it turned out. The CCAF host the CDAP “in collaboration with 16 prominent public and private institutions”. We also find Mastercard, Visa and the International Monetary Fund.
Everything made perfect sense right there.
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