China returns as 2nd top Bitcoin mining hub despite the crypto ban

China still hosts 21% of the total global Bitcoin hash rate after the local government banned all crypto operations in the country last year.

The Chinese government has not managed to take down cryptocurrency operations as part of its crypto ban last year as China has re-emerged as one of the world’s largest Bitcoin (BTC) mining hubs, according to a new report.

China became the second-largest Bitcoin hash rate provider as of January 2022, months after the local government banned all crypto operations in the country, according to the latest update from the Cambridge Bitcoin Electricity Consumption Index (CBECI) shared with Cointelegraph on Tuesday.

Bitcoin miners in China accounted for 21.1% of the total global BTC mining hash rate distribution as of early 2022, following only the United States, which produced 37.8% of the total hash rate as of January, according to the data.

China was once the world’s largest Bitcoin mining country, with the local BTC hash rate power accounting for more than 75% in 2019. The hash rate then plummeted to 0% in July and August 2021, following a series of crypto mining farm shutdowns in the country.  

Despite the crypto ban in September 2021, the hash rate share surged to 22.3% that month and did not drop below 18% over the analyzed period.

CBECI project lead Alexander Neumueller told Cointelegraph that the new data is enough to conclude that Bitcoin mining is still live in China, stating:

“Our data empirically confirms the claims of industry insiders that Bitcoin mining is still ongoing within the country. Although mining in China is far from its former heights, the country still seems to host about one-fifth of the total hash rate.”

Russia drops out of the top three largest miners

The latest CBECI update also signals a slight drop in the hash rate share in Kazakhstan, the world’s third-largest BTC mining hub. Kazakhstan’s BTC hash rate share dropped from 18% in August to 13.2% in January.

The CBECI data also shows that miners now mine as much as 9% of the global BTC hash rate in undefined locations. Canada and Russia are the following major mining hubs, accounting for 6.5% and 4.7%, respectively.

In addition to dropping out from the three biggest countries by BTC hash rate power, Russia also saw its actual hash rate declining from 13.6 EH/s in August to 8.6 EH/s in January.

Georgia, Texas and Kentucky lead BTC hash rate production in the US

The new CBECI update provides more specific insights about the largest Bitcoin mining market’s hashrate distribution at the state level.

Related: Bitcoin network hash rate hit a new record high amid price volatility

The data shows that Georgia, Texas and Kentucky make up the three largest states in terms of hash rate, accounting for 32%, 11.2% and 10.9%, respectively. All three states combined account for more than half of the overall hash rate in the United States.

Notable mining activity can also be found in the states like New York, California, North Carolina and Washington, the data suggests.

Methodology: CBECI uses data from four mining pools

The CBECI is released under the umbrella of the Cambridge Digital Assets Programme, a research initiative host Cambridge Centre for Alternative Finance.

The report is based on data obtained in collaboration with four major mining pools, BTC.com, Poolin, ViaBTC and Foundry. According to the CBECI website, the sample size for the analyzed mining pool data has varied between 32% and 38% of Bitcoin’s total hash rate since the release of the mining map in 2019.

“We are continually seeking ways in which to improve our data in order to increase the reliability of our estimates. The best way for us to do this is to welcome additional contributing mining pools, so we would encourage other mining pools to reach out and get involved,” the CBECI project lead said.