Chinese cryptocurrency miners continue to work underground

CNBC reporters investigated and found that some cryptocurrency miners continue to operate in China, despite the fact that this activity is strictly prohibited in the country. Moreover, the Chinese share of the bitcoin network is still significant, some sources are sure.

Chinese cryptocurrency miners continue to work underground


According to scientists at the University of Cambridge, China's share in world bitcoin mining has fallen to zero so far, however, according to CNBC sources, it is still up to 20%. This, of course, is inferior to the previous records at the level of 65% to 75%, but still represents a noticeable value. According to the Chinese cybersecurity company Qihoo 360, as of November 2021, 109,000 Chinese IP addresses were active daily in mining. Most of these addresses belong to Guangdong, Jiangsu, Zhejiang and Shandong provinces.

After Beijing banned mining across the country, major players promptly shut down their equipment. Some of them hoped that the situation would change, as many of the previous bans were subsequently relaxed. However, this time, Beijing was not joking, as decentralized assets not only weakened control over financial flows in the country, but also impeded the advancement of the official digital yuan. As a result, large and medium-sized miners were forced to move their equipment to Kazakhstan, the United States and other countries with inexpensive electricity and the ability to host crypto farms.

And some small miners decided to stay, changing the strategy of their activities. They distributed their equipment among several regions of the country, feeding it from local sources of electricity that are not connected to the central grid, the power drop on which the authorities quickly notice. One of CNBC's Chinese interlocutors, who introduced himself as Kirk, said that he now has two crypto farms: 12 and 8 MW. To connect one of them, he rented a small hydroelectric power station operating outside the centralized network. At some point, the authorities suspected that something was wrong, but the owner of the hydroelectric power station covered his tenant - out of personal sympathy, Kirk is sure. “There is an important reason why many miners did not capitulate and did not sell their equipment - because for them it is access to capital abroad,” he concluded.

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