China surpasses the US and controls 55% of the Bitcoin network
Despite severe restrictions imposed by the Chinese government on cryptocurrency mining and trading since 2021, China continues to be the leading power in the global Bitcoin hashrate, controlling 55% of the global network.
This surprising data, revealed by reports from CryptoQuant, defies expectations that the country would lose its influence in the Bitcoin mining sector after the ban.
The hashrate refers to the computational power used in the Bitcoin network to validate transactions and secure the system. The higher the hashrate, the more robust and secure the network.
Even with legal restrictions, Chinese miners continue to dominate this activity. The Asian country surpasses the United States, which has 40% of the global hashrate.
The ability of Chinese miners to stay on top despite bans may be related to the decentralized nature of Bitcoin and the creativity of operators in the country.
Underground cryptocurrency mining and transaction networks continue to operate, often utilizing VPNs and other methods to circumvent regulations. According to estimates, illegal cryptocurrency transactions in China generate approximately US$86 billion annually.
Bitcoin Mining in China
Furthermore, Chinese mining pools have proven resilient, supporting small miners operating locally. This contrasts with large US mining pools, which are dominated by institutional operations with access to cutting-edge technology and vast financial resources.
In the United States, Bitcoin mining has grown substantially. The activity is driven by the search for energy independence and increased interest from institutional investors. Mining in the country represents around 40% of global hashrate, growth that challenges China's dominance. However, it is still not enough to overcome it.
Technological advancement and massive investment in mining infrastructure in the US, especially in states like Texas, position the country as China's main competitor in the sector. However, even with this accelerated growth, Chinese dominance persists.
China's stance on cryptocurrencies continues to be one of the strictest in the world. Since 2017, the Chinese government had already banned Initial Coin Offerings (ICOs) and closed local cryptocurrency exchanges.
In 2021, the country imposed a ban on Bitcoin mining and transactions, with the aim of mitigating financial and environmental risks. However, this repression was not enough to weaken the country's presence in the global cryptocurrency market.
Although China has maintained tight control over decentralized cryptocurrencies, the country has invested heavily in developing its own digital yuan, a digital currency controlled by the People's Bank of China (PBoC).
This initiative is part of a broader strategy to maintain control over the country's financial system while limiting the impact of decentralized digital assets like Bitcoin.