Workers transferring cryptocurrency mining rigs at a farm in Sichuan province
AFP | Getty Images
Kirk is mining for bitcoin in the Chinese province of Sichuan, hoping every day that he doesn’t get caught by the authorities.
Like other crypto miners who have gone underground since Beijing cracked down on the industry earlier this year, Kirk — who asked only to be identified by his nickname to ensure his safety — is getting creative to evade detection.
Kirk has spread his mining equipment across multiple sites so that no one operation stands out on the country’s electrical grid. He has also gone “behind the meter,” drawing electricity directly from small, local power sources that are not connected to the larger grid, such as dams. He’s taken steps to conceal his geographic digital footprint, as well.
Kirk tells CNBC that he is used to “getting around things” when it comes to running a business in China, but the last six months have really raised the stakes.
“We never know to what extent our government will try to crack down…to wipe us out,” Kirk said.
Bitcoin mine in Sichuan, China
The Washington Post | Getty Images
Tracking down outlaws
Kirk is not alone.
Although Beijing exiled its crypto miners in May and then doubled down on its mining ban in September and again in November, multiple sources tell CNBC that as much as 20% of all the world’s bitcoin miners remain in China. This is well off its peak of around 65% to 75% of the global market, but it is substantially more than an official estimate from Cambridge University that puts China’s current share at 0%.
Data from Chinese cybersecurity company Qihoo 360 shows that underground crypto mining appears to be alive and well in China. In a November report, the research group estimated that there are an average of 109,000 active crypto mining IP addresses in China on a daily basis. Most of those addresses, according to the report, are in the provinces of Guangdong, Jiangsu, Zhejiang, and Shandong.
Crypto mining has survived in China, in part, because lot of miners weren’t sure whether Beijing was actually serious about the ban.
China has repeatedly lashed out against digital currencies, but each time, the sting wore off, and the rules eventually softened. The country’s announcement this spring that it would be cracking down on crypto mining dovetailed with the centennial of the founding of the Chinese Communist Party, a time when there was pressure on lawmakers to show strength. Some miners – especially smaller-scale operators who didn’t have the resources or the connections to migrate abroad – figured a lot of the crypto talk …….
Source: https://www.cnbc.com/2021/12/18/chinas-underground-bitcoin-miners-.html
