Beijing Horrified As Secret Chinese Crypto Miners Cause New Bitcoin Surge

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Last Updated on 22 May 2022 by CryptoTips.eu

Jeroen Kok

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The images we saw coming out of Shanghai in the past few weeks were quite striking. A city of 25 million has been put under a lockdown for some six weeks already, with residents not being able to even leave their apartments. In fact, some 30 midsized cities in China are suffering the same fate, but Shanghai, because of it’s enormous size, is catching the world’s attention.

The government in Beijing is trying hard to delete every video uploaded to Wechat or Weibo (the local social media channels) that shows discontent or even talk of uprising against the authorities, but more and more posts are getting through.

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Zero growth and zero production

It is imperative that the government of Xi Jinping keeps good control of the situation, as no authoritarian regime can survive for long without controlling the media. The running gag in Shanghai is that China will reach ‘zero growth’ and ‘zero production’ before it reaches ‘zero covid’.

Another worrying sign for Beijing authorities is the news that China’s hash rate on the Bitcoin network is once again growing. Yes, you heard that correctly, even though Bitcoin mining is still strictly forbidden in the Middle Kingdom, so many crypto miners feel that it’s better to mine Bitcoin illegally that not at all. To give you an idea of how big the illegal crypto mining operation in China actually is, they’ve recently surpassed Kazachstan as the second biggest Bitcoin miner in the world and are just behind the US again.

According to rumors, miners use proxy servers and operate via hidden IP addresses. In this manner, they can stay out of the government’s sight.

Problem is that Beijing knows the type of Bitcoin mining that goes on illegally mostly relies on coal, and can thus hamper the Chinese government’s plan to become a zero emitter of greenhouse gasses by 2060, if it is not closed down in the coming years.

The Cambridge Centre for Alternative Finance admitted that these “covert mining operations” has allowed China to “re-emerge as a major mining hub” grabbing 21.11% of global hashrate.

The US still has 37% of the hashrate.