When it comes to laws and regulations, China is universally acknowledged as one of the strictest countries. The crypto ban that China imposed in 2020 essentially meant an end for any crypto-related business in China, and the crackdowns were both intense and brutal. For a long time, it was assumed that there was no way Chinese people could find a way back into cryptocurrencies, be it investing or mining. But things seem to be changing, and whether it means slack on the part of the government or ambition on the part of citizens is still unclear.
One of the most widely cited databases in the crypto world is the Cambridge Bitcoin Electricity Consumption Index. To put it simply, it shows how much electricity crypto miners are consuming in different parts of the world. We would expect to not see China anywhere on the list. That was also the case for some time. In July 2021, there was no reported mining activity in China. The same thing continued in August 2021, data from September 2021 shows that 22.3% of global mining activity came from China.
Now there are multiple ways of looking at it. If we take the most straightforward stance, Chinese miners are no longer afraid of what the government can do. But there’s another possibility as well. The use of VPN services can skew the Cambridge Bitcoin Electricity Consumption Index data, leading to the false assumption that 22.3% of mining activity is actually coming from China. But the second argument does not explain why the share dropped to 0% for two months. The verdict is still not out about the truth of the situation.