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Kryptocurrency Miners Celebrate Quiet Comeback in China
Despite the ongoing ban on Bitcoin mining in China, the country has re-emerged as a significant player in the cryptocurrency mining sector, currently ranking third globally. This resurgence is largely attributed to the record highs of Bitcoin, Ethereum, and other cryptocurrencies, coupled with access to cheap electricity. According to Julio Moreno, Chief Analyst at CryptoQuant, "Bitcoin mining is still officially banned in China, yet there are still significant capacities being utilized."
Recent data from Hashrate Index indicates that 14% of all cryptocurrencies are mined in China. The mining process involves users providing computational power for the encryption and verification of transactions, receiving cryptocurrency as compensation. The availability of low-cost electricity is a crucial factor for mining operations, especially in regions like Xinjiang, where energy is abundant and primarily used for cryptocurrency transaction verification.
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“Bitcoin mining is in China officially still banned,” says Julio Moreno, Chief Analyst of CryptoQuant.
In Xinjiang, numerous mining projects are currently under construction, as local governments aim to utilize their oversized data centers through mining activities. The Chinese authorities have not commented on this situation.
Key Takeaways:
- China ranks third in global cryptocurrency mining despite an official ban.
- 14% of all cryptocurrencies are mined in China, with Xinjiang being a key region.
US Government Investigates Bitmain's Mining Operations
The US government is currently investigating whether Bitmain's mining machines pose a national security risk. Several agencies are examining potential backdoors and remote control capabilities in the Chinese hardware. Bitmain has denied all allegations, while experts believe that covert access would be challenging to implement.
This investigation, which reportedly began under President Joe Biden, highlights the growing political tensions surrounding Chinese technology in the US. The Senate Intelligence Committee has also conducted inquiries, concluding that Chinese authorities could potentially compel Bitmain to provide sensitive data. Concerns have been raised about the implications of compromised mining fleets on critical energy infrastructure.
“The investigation against Bitmain is part of broader security measures against Chinese technology,” reports Bloomberg.
In 2024, President Biden prohibited MineOne Partners from operating a mining facility near a military base due to fears of espionage risks associated with foreign hardware. US customs have also halted shipments of Bitmain machines for inspection, citing security and potential tariff violations.
Key Takeaways:
- The US is investigating Bitmain for potential national security risks.
- Concerns include possible remote access to mining machines and implications for energy infrastructure.
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