Based on a recent Cambridge Center for Alternative Finance (CCAF) study from Cambridge University, bitcoin mining activity in the country has increased from 0% in August to 22.3% in September 2021.
The regrowth of this industry is in stark contrast to the decline in crypto mining activity from 34.3% in June to 0% in July 2021.
For the record, China controls the blockchain processing power or so -called “hash rate” with a rate of 65% to 75%.
Indirectly this latest revelation carries the meaning of China once again being the highest hash rate contributor, second only to the United States (US).
The question arises, how can this sector grow back in a short period of time after being banned when Chinese crypto miners have moved to the US, Pakistan, Kazakhstan, and Africa?
Undoubtedly some openly operating crypto mining companies are said to have actually moved based on reports of crypto mining locations in the US. There are also a handful that have closed immediately.
The hash rate spike may be due to one possibility - they are actually still in China.
According to the CCAF, it is common for bitcoin miners in some places to use virtual private networks (VPNs) or proxy services to obscure the location of their IP addresses.
VPNs make it easier for users to divert their traffic through servers from other countries, and so do Chinese crypto miners who have faced internet restrictions for bitcoin mining purposes.
Simply put, there has been a secret crypto mining syndicate.
This situation may be good news for some but it could also be bad news because China has the potential to once again ‘block’ bitcoin, thus creating FUD in the crypto market.
