Bitcoin mining operations in China have resurged to capture 14% of the global network's computing power, positioning the country as the third-largest mining hub despite a nationwide ban that took effect in 2021. The renewed activity marks a significant shift in the cryptocurrency's geographic distribution, with approximately 145 exahashes per second now originating from Chinese facilities.
What Happened: Mining Revival
Data from Hashrate Index and network monitoring services show Chinese mining capacity has climbed back into third place globally, trailing only the United States and Russia. Operations have concentrated in Xinjiang and Sichuan provinces, where electricity costs remain low during certain periods. Miners are employing a combination of legacy facilities, small-scale private setups and cloud computing arrangements designed to obscure mining activity as conventional data processing work.
The resurgence comes as mining hardware manufacturers report stronger domestic sales.
Canaan, a major producer of mining equipment, has documented increased Chinese demand, indicating fresh capital flowing into both new hardware purchases and facility construction rather than simply reactivating dormant machines.
Operators have repurposed existing factory and data center infrastructure to minimize upfront investment requirements.
Mining profitability has declined sharply across the industry this year.
Hashprice, which measures estimated revenue per unit of computing power, fell to record lows as Bitcoin's price weakened, transaction fees dropped and network difficulty increased. The pressure has forced operators worldwide to prioritize efficiency and access to cheap electricity.
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Why It Matters: Network Concerns
The concentration of mining power in China raises questions about Bitcoin's geographic decentralization and regulatory risk. While mining remains officially prohibited across much of the country, enforcement appears inconsistent. Some operations function covertly while others operate through partnerships with local energy providers and industrial firms that supply power and physical space.
Network security depends partly on hashrate distribution across multiple jurisdictions and control systems.
A significant cluster in any single region or regulatory environment potentially reduces the network's resilience. Current tracking data places China at 14% of global capacity, though these figures shift as miners deploy or retire equipment.
Industry observers are monitoring three developments: potential changes in Chinese enforcement policy, quarterly performance of hardware manufacturers like Canaan, and whether mining revenue recovers if Bitcoin's price strengthens.
Softer enforcement in certain regions could enable more visible growth, while stricter crackdowns might scatter operations again as occurred after the 2021 ban.
The United States and Russia maintain larger mining shares, which limits immediate systemic concerns. However, the speed of China's return demonstrates how quickly the network's geographic makeup can change when economic incentives align with available infrastructure and power resources.
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