Despite crypto ban, China remains world's second-largest Bitcoin mining hub

According to the latest Cambridge Bitcoin Electricity Consumption Index (CBECI) from the Cambridge Center for Alternative Finance at the University of Cambridge, China remains the second largest country in the world in terms of Bitcoin hash rate as of January 2022. Data shows that as of early 2022, Chinese Bitcoin miners accounted for 21.1% of the total global Bitcoin mining hash rate, second only to the United States, which accounted for 37.8% of the world's total hash rate.

On September 15, 2021, the Chinese government issued a ban. Due to the frequent speculation in virtual currency transactions , the economic and financial order has been disrupted, gambling, illegal fundraising, fraud, money laundering and other illegal and criminal activities have been spawned, endangering the property safety of the people. In order to further prevent and deal with the risks of virtual currency transaction speculation, a series of regulations have been made. Virtual currency-related business activities are defined as illegal financial activities. While banning various encryption-related businesses, Bitcoin mining-related businesses are also explicitly banned.

According to the data in the above figure, after China banned Bitcoin mining, the United States replaced China as the world's largest Bitcoin mining country. It is worth noting that in September 2019, China's Bitcoin mining computing power once accounted for 75.53% of the world.

Although China once occupied a leading position in the mining industry, it was not until June 2021 that mining farms in Inner Mongolia, Yunnan, Xinjiang, Qinghai, and Sichuan were required to clean up, rectify or shut down, restricting the "mining" activities of virtual currencies such as Bitcoin from the source, reducing the amount of electricity consumed in mining activities, and strengthening the management of cryptocurrency transactions. As shown in the above figure, China's Bitcoin mining computing power was zero in July and August 2021. But surprisingly, in September, despite the issuance of a ban, China's Bitcoin mining computing power began to recover that month and accounted for 22.3% of the world. Miners did not seem to take the ban seriously. Since then, from November to January, China has long occupied the second place in Bitcoin computing power, accounting for about 1/5 of the market share.

CBECI was published under the umbrella of the Cambridge Digital Assets Initiative, a research initiative of the Cambridge Center for Alternative Finance. The report is based on data from four major mining pools: BTC.com, Poolin, ViaBTC, and Foundry. According to the CBECI website, the sample size of the mining pool data analyzed since the release of the mining map in 2019 accounts for approximately 32% to 38% of the total Bitcoin hash rate. "We are always looking for ways to improve the data to increase the reliability of our estimates," Alexander Neumueller , project leader at CBECI, told cointelegraph. "The best way to achieve our goal is to welcome more mining pools to contribute their data, so we will encourage other mining pools to reach out and participate."

As of now, according to BTC.com data, the difficulty of the entire Bitcoin network has reached 31.25 T, reaching a historical high; at the same time, the latest data from BTC.com shows that the computing power of the entire Bitcoin network has reached 254.77 EH/s, also reaching a historical high. This means that despite the increasing difficulty, more miners are still willing to join the network.