China’s 2021 Mining Ban Has Failed Spectacularly — Underground Crypto Miners Lift It to Top 3 Mining Hubs Worldwide

Key Takeaways

• China’s stock of planetary Bitcoin mining has softly climbed backmost to 20% contempt a 2021 nationwide ban.

• The state is present the world’s third-largest Bitcoin mining hub again.

• China joins respective countries that attempted broad crypto bans lone to reverse people oregon modulate aft enforcement proved ineffective.

When China outlawed Bitcoin (BTC) mining successful mid-2021, the authorities expected the manufacture would vanish overnight.

For a abbreviated moment, it did. Hashrate collapsed to astir zero. Mining farms were dismantled. Operators fled to Kazakhstan, Russia, and the United States.

However, 4 years later, the representation tells a antithetic story: China is backmost and is already among the top-ranking crypto mining hubs successful the world.

A quiescent resurgence of underground Bitcoin mining—largely concentrated successful regions with cheap, abundant electricity—has lifted China backmost into the apical 3 crypto mining hubs globally, according to caller reporting from Reuters and web estimates from CryptoQuant.

Current figures suggest Chinese crypto miners present lend arsenic overmuch arsenic 14-20% of the full Bitcoin hashrate.

Industry sources and caller installation builds constituent to a increasing instrumentality of crypto miners to Xinjiang and Sichuan, regions historically known for excess hydropower and stranded energy.

Wang, a backstage crypto miner operating successful Xinjiang, told Reuters helium restarted operations precocious past year:

“A batch of vigor cannot beryllium transmitted retired of Xinjiang, truthful you devour it successful the signifier of crypto mining. New mining projects are nether construction.”

This re-emergence isn’t astonishing to analysts.

Within a twelvemonth of the ban, web information showed crypto mining enactment creeping backmost into Chinese territory, contempt Beijing’s ongoing hostility toward decentralized integer assets.

Now, China sits comfortably down lone the U.S. and (depending connected measurement period) either Russia oregon Kazakhstan successful planetary hashrate share.

China’s failed effort to hitch retired Bitcoin mining is hardly unique.

Over the past decade, respective countries person tried to outlaw crypto, lone to reverse people erstwhile they discovered bans are hard to enforce and adjacent harder to maintain.

Russia concisely flirted with a afloat crypto prohibition successful 2022, targeting mining, trading, and payments.

The connection collapsed wrong weeks arsenic the authorities decided regulation—not prohibition—was much practical.

Today, Russia has legalized crypto mining and adjacent permits the usage of cryptocurrency for planetary trade.