How China Became a Mecca for Crypto Mining

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  • China has been the home of crypto mining for over a decade
  • The recent ban by the Chinese government is threatening that dominance
  • Why did China become a Mecca for crypto mining in the first place?

Crypto mining has been in the news more in the past few months than ever before, with China being the focus thanks to the government reinforcing a crypto mining ban in May. Following years of similar ‘bans’ that have never been followed by any action to back them up, as the saying goes ‘this time it’s different’ and local governments have been forced to take steps to sweep away all traces of crypto mining from their regions in line with a new national policy. But how did China become a mecca for crypto mining in the first place? Our quick guide explains.


One reason China became a crypto mining hub is due to its abundance of opportunities for hydroelectric power generation. The combination of huge rivers and mountainous terrain offers great opportunities for entrepreneurial crypto miners, who set up their crypto mining equipment next to hydroelectric stations during China’s wet season (April-September) and take advantage of the huge amounts of free electricity generated as a result.

Areas such as Yunnan and Sichuan have become hugely popular for crypto miners for this reason.

Cheap Electricity

Unless you can get your hands on a plentiful supply of naturally occurring energy (see above) you need to find somewhere that can supply your power very cheaply. This is what China does, utilizing its network of huge coal-fired power stations to supply extremely cheap electricity to its cities. This also of course makes it an attractive option for crypto miners.

Provinces such as Inner Mongolia and Xinjiang are extremely popular thanks to their cheap and abundant coal-powered electricity, areas that experience an influx of temporary crypto miners who pack up their equipment and drive it thousands of miles from areas like Yunnan and Sichuan in the dry winter months.


China is, of course, huge, with massive areas of barren desert and plenty of mountainous regions. This makes it hard for local governments to keep tabs on who is mining crypto, and where and when they are doing it. This gives smaller and more nomadic crypto miners a chance to operate outside of state control with a reduced risk of being found out.

Large crypto miners are the most at risk from the newly enforced ban, but this is not to say that those same companies are not moving to smaller, harder to find operations that are learning how to operate under the radar.

Cheap Equipment

It is perhaps no surprise that the biggest manufacturer of crypto mining equipment in the world, Bitmain, is Chinese. Founded in 2013, Bitmain equipment caters for some 70% of all Bitcoin mining equipment used in the world today. The company’s products are of course made in China, which gives Chinese crypto miners an advantage over those in other countries, able to buy in bulk without the exorbitant shipping fees and concomitant delays.

Other cheaper crypto mining equipment is also almost always made in China or nearby, meaning that even those who don’t use Bitmain equipment can still operate at a cheaper level than foreign crypto miners.

Will Crypto Mining Have a New King?

It is clear why China has been favored by crypto mining companies for so long, but with the Chinese government taking such swift and savage action its time could soon be up. Of course some crypto mining operations will remain in the country, but the giants will have little choice but to shut their operations down, at least temporarily.

Crypto mining operations from Russia to the U.S. will be rubbing their hands at the news that, after over a decade’s domination, China’s monopoly over crypto mining is finally coming to an end.