While on the surface it looks like officials from five provinces in China have cracked down on Bitcoin miners, no one is sure how much hashrate is moving, which pools are affected, or where those miners will end up. A number of mining pools have had their hashpower percentage decreased and Bitcoin’s overall hashrate has also decreased. On the other hand, the computing power of “unknown” pools has risen sharply, since several known pools have lost the hashrate.
Pool percentages decrease, overall hashrate decreases
There have been reports from officials in provinces such as Inner Mongolia, Xinjiang, Qinghai, Yunnan and Sichuan instructing bitcoin miners to close stores. The crypto community generally assumes that a lot of hashrate comes from China, but how much hash power actually resides in the country is still a mystery. Reporting on Bitcoin mining operations is rare and the latest studies are out of date.
The hashrate distribution shows that known pools that have disclosed their identities have recently suffered losses in hash power. June 2021, the hash rate of the Bitcoin (BTC) network was around 191 exahashes per second (EH / s) and is now just above the 100 EH / s zone. The metric has fallen below 100 EH / s a couple of times but has remained pretty consistent at that level since June 19.
Interestingly, pools like Antpool, F2pool, Viabtc, Poolin, and Btc.com have seen large swings in hashrate, but they remain the five largest mining pools in the world. Antpool and Viabtc, considered “Chinese pools,” also have the highest SHA256 hashrate in the world of any chain using the SHA256 consensus algorithm. In the BTC chain, today’s top 5 mining pools were the top miners for months in 2021, with some pools switching positions every now and then.
The return of the mysterious miners
Since the first warnings from Inner Mongolia in the first week of March 2021, stealth mining has increased significantly. Mystery miners – those involved in stealth mining – have been widespread since the Bitcoin network started. If you looked at the BTC hashrate distribution today, you would basically notice 18 pools revealing their identities.
But there is one more piece of hashrate that is referred to as “unknown” in the hashrate distribution charts from Btc.com and other hashrate aggregation / distribution websites. Since China began cracking down on Bitcoin miners, the mysterious hashrate – which is now the seventh largest mining pool – has risen sharply. Statistics show that stealth mining pools have been finding many more blocks since March 2021 and unknown hash has increased every month after that.
Unknown hashrate commands around 10 EH / s of BTC hash power today and over 12% of total SHA256 hashrate processing blocks in BTC, BCH, and BSV chains. The crypto community understands that mining operations that do not want to be identified use virtual private networks (VPNs) or proxy services to hide their IP addresses. Mystery hash was very common in 2018 and 2019, but it dropped sharply in 2020. In January 2019, Mystery Hash dominated 22% of the BTC chain and 17% of the BCH chain. At the time, Coin Metrics published a study on the mystery hash phenomenon.
Coinmetrics stated that between mid-2015 and mid-2017, most miners revealed their identity via the Coinbase parameter in order to identify themselves with the name of their pool. “However, unknown miners increased through 2018,” Coin Metrics said, stressing that the statistics “have shown a newfound appreciation for the privacy or emergence of miners who have something to hide.”
But towards the end of 2019 and most of 2020, there was almost no unknown hashrate. That trend changed a lot in 2021, and the unknown hashrate has returned, coincidentally as Beijing plans to crack down on bitcoin mining and crypto trading in China. There’s probably a reason why bitcoin miners are back this year with something to hide.
What do you think of the return of the mysterious hashrate after China started cracking down on bitcoin miners in the country? Let us know what you think on this matter in the comments below.
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