Reading time: ~ 2 m
Chinese miners work stealthily, surviving by using autonomous energy sources. Recently, there has been a migration and massive exodus of Chinese miners to more crypto-friendly jurisdictions in North America and Central Asia. This happened after a complete ban on cryptocurrencies in China. Many of the miners with fewer resources were left to fend for themselves.
Some miners stayed at home. This is due to travel restrictions due to the pandemic, supply chain problems, and a lack of overseas contacts and money.
How do they stay in business?
The surviving miners use a combination of grid and hydropower. Hydropower users get their energy from dams located in Sichuan and Yunnan provinces. These structures are subtle and do not attract the attention of the government. This is especially true during the rainy season, which lasts from May to late autumn. Miners are building their own infrastructure to make the power from the dams compatible with their equipment.
A VPN is used for the sites to avoid detection by the government. China Telecom acts as a vantage point for the Chinese government regarding mining activities.
Chinese cybersecurity firm Qihoo 360 recently released a report. It shows that mining continues to thrive despite being banned across the country. According to the report, there are 109,000 active internet protocols (IP addresses) for mining every day. Some miners use mining pools to hide their operations.
Foreign mining pools help
Mining pools are also becoming more popular among Chinese crypto enthusiasts. When a block is resolved, the name of the mining pool is often attached to the block in the public ledger. However, this name does not have to be fixed. By not fixing it, Chinese miners are avoiding detection. Data packets originating from Chinese data centers are encrypted and appear like regular web traffic to those monitoring data exchange. Overseas mining pools also help Chinese data centers solve technical problems. They can mask the number of unique IP addresses originating from the data center. The presence of a large number of IP addresses is also a wake-up call for the government.
Time will tell if seasonal fluctuations in rainfall will lead to further drain of hardware and miners. Traveling to Inner Mongolia and Xinjiang, as has been done in the past to gain access to coal-fired electricity, is not possible.
#Chinese #miners #mining #cryptocurrency
