China is coming back strongly. The Cambridge Center for Alternative Finance, or CCAF, collected data “covering 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-mine hashrate. Since June 2021, here at NewsBTC, we’ve been trying to figure out why China banned bitcoin mining. Maybe we barked at the wrong tree all the time.
According to CCAF-FCVI figures, not surprisingly, “the US remained at the forefront of bitcoin mining and expanded its leadership position (37.84%).” For their part, “China has reappeared as an important mining center (21.11%). Kazakhstan (13.22%), Canada (6.48%) and Russia (4.66%) were relocated to more distant places. Let us 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 has formed in the country.” Can we be sure that the explanation is genuine? And if so, how has China’s underground bitcoin mining industry grown so rapidly?
“After the government’s ban in June 2021, the reported hash rate reported for the whole country effectively dropped to zero in the months of July and August. Yet the reported hash rate suddenly jumped back to 30.47 PE / s in September 2021, instantly slashing China to second place in the world in terms of for installed mining capacity (22.29% of the total market). “
The report wonders what happened, “a return of this magnitude within a month seems unlikely given the physical constraints as it takes time to find existing non-traceable accommodation facilities or build new ones on this scale”. The theory is 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 “hash rate recovery was not evenly distributed.” How did the non-Chinese countries in the Top 5 behave?
- The United States “outperformed the rest of the world in terms of cannabis growth. This is evident from the installed capacity, which jumped 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 rise in September, peaking at 27.31 pe in October, until repeated power outages towards the end of last year, and a week-long internet outage earlier this year, forcing miners to suspend operations. »
- Surprisingly, on the other hand, Russia not only experienced a significant decrease in the relative hash rate share from 11.23% in August 2021 to 4.66% in January 2022, but also a significant decrease in the total contribution-installed mining capacity from 13.56 PE / s to 8.74 PE / s in the same period. »
- Finally, Canada experienced only a moderate increase in its hash rate, from 11.54 PE / s in August 2021 to 12.15 PE / s in January 2022, resulting in a loss of market share of 9.55% to 6.48% as it overall network hash rate grew much faster. ”
CCAF-FCVI wound splits
Of course, the Cambridge Center for Alternative Finance could not pass up the opportunity to spread unfounded rumors about bitcoin mining. Here’s what the CCAF said:
“These geographic shifts in mining activities highlight the impact of relocations on the network’s overall sustainability. For example, recent research has suggested that China’s decision to ban bitcoin mining has actually exacerbated – rather than improved – bitcoin’s environmental footprint.”
CCAF-FCVI user the results of this studywhich basically says they NOW believe in what bitcoiners have always said. That China primarily used hydropower for bitcoin mining, not coal. The thing is, when it comes to using green energy, bitcoin mining continues to be so the cleanest industry in the world.
Every time we find a deliberate spread of RD&D like this, we need to check who has paid for the study. It turns out that the numbers come directly from the Cambridge Digital Assets program. CCAF-FCVI hosts the CDAP “in collaboration 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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