In the past few weeks, there have been many reports about cracking down on Bitcoin mining operations across China. The 30-day statistics show that computing power has been fluctuating violently, and has fallen by about 26% in the past week.
Report shows Bitcoin mining in five provinces in China has been hit
Despite the decline, the world’s top three mining pools (approximately 41% of today’s computing power) are considered to be Chinese mining pools. However, this does not necessarily mean that the mining pool actually has physical Bitcoin mining facilities in mainland China.
Today, how much computing power China has is a million-dollar question. Especially after Beijing’s suppression of the mining industry and subsequent bans in several provinces.
In the first week of March 2021, the report first appeared in Inner Mongolia, and then on June 9, 2021, a report disclosed that certain Bitcoin miners in Xinjiang had been instructed to shut down.
Another task has emerged for crypto miners in Qinghai Province. After Qinghai Province, the Yunnan authorities also severely cracked down on Bitcoin mining operations in the region.
Then, just as everyone was waiting for news from Sichuan, as the report on May 31 informed the public that a meeting was being held, the news finally arrived. Sichuan officials sent a notice to Bitcoin miners in the province, asking them to shut down by June 25.
Errors found in the existing computing power reference graphs and assumptions
The hash rate chart shows that in the past 7 days, the Bitcoin network hash rate has declined and is currently hovering above the 100 exahash per second (EH/s) area. The problem is that no one is completely sure how much computing power China has and how many operations have been forced to migrate.
Many mainstream reports point to the Cambridge Centre for Alternative Finance Index Map, also known as CBECI. The unreliable CBECI map has not been updated since April 2020. The map shows that 65% of the computing power is in China.
CBECI data also has great limitations in terms of estimation, because it only collects data from three large mining pools and “aggregated geographic location data based on the IP address of the hasher connected to the mining pool”. Cambridge further pointed out that “Hashers in certain locations use virtual private networks (VPN) or proxy services to hide their IP addresses and locations.”
In addition, at any given time, a large number of invisible miners are known to dedicate their computing power to the BTC network. These invisible miners, called “unknown” in the hash distribution pie chart, accounted for about 6% of the network’s hash value this weekend. Sometimes, in the past few years, mysterious miners have collected more than 20% of the computing power.
The portal digiconomist.net is similar in that it shows an unreliable Bitcoin network hash rate chart, but it has not been updated since April 2020. In China, digiconomist.net surveys show operations in Beijing, Inner Mongolia, Guangdong, Qinghai, Yunnan, Sichuan, Shanxi, Guizhou, Gansu, Ningxia, Shaanxi, Zhejiang, Hebei.
Coinshares also released a study that emphasized that 74% of global Bitcoin mining operations in 2019 were driven by renewable energy. The in-depth report does include surveys of multiple mining locations around the world and includes a map.
Coinshares’ map is quite basic, but it conveys a general idea that China has a large proportion of miners, especially Sichuan. Between the CBECI map, the digiconomist.net chart and the Coinshares report, we still don’t have the latest percentage of how many miners there are in China.
However, Bitooda, with the support of asset management company Fidelity Investments, released a recent report on July 15, 2020, which reduced China’s hash rate from previous estimates to 50%.
In addition, errors have been found in the assumptions supporting digiconomist.net data. In 2018, another Coinshares study showed criticism of Digiconomist’s BECI and pointed out that the total energy consumption data is quite different.
Distribution of computing power and headquarters on the surface
Finally, the public can indeed access data from the hash rate distribution through the pool name. The top five major mining pools today are Antpool, Viabtc, F2pool, Btc.com and Poolin. In terms of computing power percentage, the lower ones are Binance Mining Pool (unknown entity) and Foundry USA.
Measuring data in this way is wrong, because not all mining pools are hard operations, because many mining pools are hashing power from physical facilities and miners from all over the world pool computing power with mining pools的mix. There is no known location for Binance Pool, and Poolin stated that its operational headquarters is located in Hong Kong.
Baoyin’s website details that it does have offices in Beijing, Chengdu and Changsha, China. Bitmain’s Ant Mine Pool says its headquarters is in China, while Viabtc’s records and F2pool (officially known as Discus Fish) also show that its headquarters is located in China.
Btc.com’s records indicate that the mining company’s headquarters are located in Amsterdam. Approximately 41% of the computing power can be considered as coming from Chinese mining pools, but we cannot be sure how much of this computing power actually comes from mainland China.
As mentioned earlier, Chinese Bitcoin mining pools are not necessarily located in China. In fact, figuring out how much Bitcoin computing power there is in mainland China is still a problem. Please pay attention to the follow-up to this comprehensive report, which covers the complete pattern of Bitcoin hash rate distribution over the past 12 years.
What do you think of the location of the miners? How much computing power do you think China has? Please tell us your thoughts on this topic in the comments section below.
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