This article aims to provide additional context to the CCAF data and explain why the data, although an important effort to try to quantify trends in the mining industry, is not reliable.
When CCAF first released its data last year, showing no mining activity in China, the project’s lead was careful to qualify it as the region’s “reported” share of hash rate, which could theoretically differ from its actual share. Other researchers, mining industry leaders and this author knew the 0% number to be inaccurate and said so publicly.
CNBC reporter MacKenzie Sigalos took these claims seriously, and she later reported on the active underground mining scene in China.
One key failure is the methodological assumption that a mining facility’s IP addresses are an accurate indication of the hash rate’s geographic location.
Some industry commentators defend CCAF’s research by asserting that slightly inaccurate data is better than no data at all.
Mining data is outstandingly difficult to accurately collect. Similar mining data sets built by the newly-launched Bitcoin Mining Council also received some public criticism for the accuracy of their methodology.
CCAF also relies on self-reporting by miners to aid its research on the geographic distribution of hash rate. The obvious problem with this exchange of information is that miners can lie.
The political motivation for miners to lie is obvious. What miner would willingly report full or even partial mining activity in the world’s most aggressively anti-mining region? Any incentive to self-report mining in China is simply non-existent.
It is simply an operational impossibility that nearly half of the hash rate that left China one year ago decided to abandon its newly secured mining facilities elsewhere in the world and relocate back to China.
China certainly has not reversed its mining ban.
The hash rate that is currently online in China has always been in China. Miners have known this and publicly spoken about it.
China is unlikely to ever regain its former share of the global bitcoin hash rate market. Industry leaders and academics alike can agree on this. [...] But the Chinese underground mining industry will never be extinguished.