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As China cracks down on bitcoin miners, stealth miners and mystery hashrate returns – Mining Bitcoin News #cryptocurrency #bitcoin #crypto #blockchain

While on the surface it seems that officials in China’s five provinces are cracking down on bitcoin miners, no one is quite sure how much hashrate is rising, which pools are affected, or where these miners will end up. Several mining pools have seen a drop in hashpower percentage and the overall hash rate of bitcoin has returned as well. On the other hand, as many known pools lose their hash rate, the processing power from “unknown” pools has increased significantly.

Pool percentage drop, overall hash rate down

There have been reports of officials in provinces such as Inner Mongolia, Xinjiang, Qinghai, Yunnan and Sichuan instructing bitcoin miners to close shop. The crypto community, in general, assumes that a very high hash rate comes from China, but how much hashpower actually resides in the country is still a mystery. Reporting is scarce when it comes to bitcoin mining operations and the most recent studies are out of date.

The hashrate distribution shows that known pools that have disclosed their identities have recently seen a loss of hashpower. On June 2, 2021, the Bitcoin (BTC) network hash rate was around 191 exhash per second (EH/s) and today, it is hovering just above the 100 EH/s area. The metric has dropped below 100 EH/s on a few occasions, but has remained fairly consistent at that level since 19 June. Pools that have seen a decline in hashrate include operations such as Okex Pool, Binance Pool, and Huobi Pool.

As China cracks down on bitcoin miners, stealth miners and mystery hashrate returns
Mystery hashes have captured between 8.63% and 10% of the total hash rate of bitcoin as of June 22, 2021. Today, the “unknown” hash rate is bouncing between the seventh and fifth largest hashrates in the world.

Interestingly, pools such as Antpool, F2pool, Viabtc, Poolin, and Btc.com have seen huge fluctuations in hash rate, but they remain the top five mining pools worldwide. Antpool and Viabtc, which are considered ‘Chinese pools’, command the highest SHA256 hashrate globally among all chains that use the SHA256 consensus algorithm. On the BTC chain, the top five mining pools today have been the top miners for months at the end of 2021, with some pools changing positions from time to time.

The Return of Mystery Miners

Stealth mining has increased significantly since the first early warnings from Inner Mongolia during the first week of March 2021. Mystery miners – those engaged in stealth mining – have been prevalent since the bitcoin network was first launched. Basically, if one looks at the BTC hashrate distribution today, they will see 18 pools that reveal their identities.

But there is another part of hashrate that is labeled “unknown” on Btc.com’s hashrate distribution charts and other hashrate aggregation/distribution websites. Since China started cracking down on bitcoin miners, the mystery hash rate – which is the seventh largest mining pool today – has increased significantly. Statistics show that stealth mining pools have been receiving a lot of blocks since March 2021, and the unknown hashes have increased every month since then.

As China cracks down on bitcoin miners, stealth miners and mystery hashrate returns
The unknown hash rate began to appear more prominently in November 2020 and 2021. During the first quarter of 2021, the unknown hash rate increased. Following China’s action, stealth hash percentage-wise increased significantly.

The unknown hash rate today accounts for approximately 10 EH/s of BTC hashpower and over 12% of the total SHA256 hash rate processing blocks on the BTC, BCH and BSV chains. The crypto community understands that mining operations that want to take advantage of anonymous leverage virtual private networks (VPNs) or proxy services to hide their IP addresses. Mystery hash was very prevalent in 2018 and 2019, but became less so in 2020. In January 2019, Mystery Hash ordered 22% of the BTC chain and 17% of the BCH chain. At the time, Coin Metrics published a study on the mystery hash phenomenon.

As China cracks down on bitcoin miners, stealth miners and mystery hashrate returns
The unknown hash rate has almost doubled in three days. While known mining pools have been identified, the hash rate percentage loss has been observed.

Coinmetrics elaborated that between mid-2015 and mid-2017, most miners disclosed their identities via Coinbase parameters to identify themselves with the name of their pool. “However, through 2018, unknown miners picked up,” Coin Metrics said, and stressed the data showed “a new-found appreciation for privacy, or the emergence of miners who have something to hide. “

But until the end of 2019 and for much of 2020, the unknown hash rate was almost non-existent. This trend has changed a lot in 2021, and the unknown hash rate is back, coincidentally Beijing is looking to crack down on bitcoin mining and crypto trading in China. This year is likely to see a new emergence of bitcoin miners who have something to hide.

What do you think about the return of the mystery hash rate after China cracked down on bitcoin miners in the country? Let us know what you think about this topic in the comment section below.

Tags in this story

antpool, bch, bitcoin cash, bsv, btc, btc.com, china, china migration, chinese miners, distribution, exhash, hash power, hashpower, hashrate, mining, mining pool, mystery miners, SHA-256, unknown miners, unknown Mining Pool, ViaBTC

image credit: Shutterstock, Pixabay, WikiCommons

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