Chinese Bitcoin Miners Using VPNs as Covert Mining Soars

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  • Chinese Bitcoin mining activity has surged in 2022
  • Bitcoin mining activity in the country has rebounded to account for over 20% of the global hashrate
  • Some Chinese miners have been using VPNs to hide their location since the May 2021 ban

Chinese Bitcoin miners may have officially been banned from operating in the country, but this doesn’t seem to have stopped them. Recent data from the Cambridge Centre for Alternative Finance (CCAF) published Tuesday showed that Bitcoin mining originating from China had enjoyed a huge resurgence, accounting for 21.11% of today’s Bitcoin hash rate. CCAF suggested that “covert mining operations” were behind the resurgence, although the real number could be even higher than this given that some Chinese Bitcoin miners are thought to be using VPNs to disguise their true location.

Chinese Miners Defying Bitcoin Mining Ban

China finally banned Bitcoin mining in May 2021 following years of promises, a move that helped kill the 2020/2021 bull market, resulting in countries like Kazakhstan and the U.S. taking up the slack. However, it seems that the mining operations that didn’t leave China have merely been keeping dormant since the ban and have found ways to restart operations under the nose of the government.

A CCAF statement accompanying the report stated that the data suggests that “significant underground mining activity has formed in the country, which empirically confirms what industry insiders have long been assuming”.

VPNs Disguising Location

This claim is based on the theory that a large number of Chinese miners never actually stopped mining but had instead been routing their operations through VPNs since the ban came into play.

Not only does this suggest that the data on Chinese mining activities could have been erroneous since May 2021, but data on other countries’ Bitcoin mining could also be skewed if Chinese miners were routing their activities through those countries.

Regardless of their VPN usage, it’s clear that Chinese Bitcoin mining is on the rise again in defiance of government guidelines which could play into the suggestion that has aired in the past that the government talks tough but doesn’t follow through with action on Bitcoin mining.