In 2021, with a single command from the Chinese government, Bitcoin mining and cryptocurrency trading were completely banned, and China, once the global mining center, seemed to exit the historical stage overnight. However, more than two years later, a recent report from Luxor reveals a shocking fact: China is currently still the third-largest contributor to global Bitcoin mining, accounting for 14.05% of the total global hash rate, second only to the United States and Russia. This not only overturns people's understanding of the current state of cryptocurrency in China but also highlights the tenacious vitality of "underground mining" under strict bans, as well as the deep-seated game between China and the United States in the field of Bitcoin hash rate.
- "Undercurrents" Under the Ban: China's "Underground Empire" of Bitcoin Mining
China was once the undisputed center of Bitcoin mining, dominating global hash rate thanks to cheap electricity and leading hardware manufacturers. However, the ban imposed by the Chinese government in 2021 aimed to completely eliminate all cryptocurrency miners.
The Resilience of "Underground Mining": Despite the government's strong efforts to eliminate all cryptocurrency miners, many miners have still found ways to continue operations. According to Luxor's global hash rate map updated for Q4 2025, China currently accounts for 14.05% of the total Bitcoin hash rate, approximately 145 EH/s. This is a slight increase from 13.8% in the third quarter.
The Third-Largest Contributor Globally: According to recent data, China is the third-largest contributor to Bitcoin mining globally, second only to the United States and Russia.
Possible Destinations: Luxor's findings did not specify the exact destinations of the hash rate. According to reports from "Miner Weekly," multiple sources in the ASIC supply chain point to a possible destination: Xinjiang. This region is relatively isolated and rich in energy resources, and before the ban was implemented in 2021, it had long been a center for Bitcoin mining.
"Punk-style" Mining: Kent Halliburton, CEO and co-founder of the Bitcoin mining platform Sazmining, stated that he is not surprised that mining is still ongoing in China. "This is one of the charms of Bitcoin mining. It’s a punk-style way of mining Bitcoin, which means as long as you have electricity and hardware, you can mine Bitcoin on your own. It’s hard to shut down mining in remote areas, which is why I believe the hash rate we see in China will continue to exist."
- The Case of Iran: The Global Spread of Illegal Mining
In addition to China, other regions considered to be engaging in illegal Bitcoin mining are also showing signs of growth.
The Rise of Iran: Farahani pointed out that Luxor's hash rate map provides insights into the situation in Iran, estimating that as of Q4 2025, the region's hash rate is about 8 EH/s, accounting for 0.75% of the global market share.
Hedging Capital Outflow: According to Halliburton, Iran is another typical example of Bitcoin mining, but most of it is illegal. Iran initially banned Bitcoin mining for four months in May 2021. A second ban was implemented in December 2021. Before this, it was estimated that Iran's Bitcoin mining accounted for 4% to 8% of the global BTC network. Halliburton stated, "Essentially, any country that strictly controls capital outflow may limit or attempt to ban Bitcoin mining. But as long as you have hash rate and the right hardware to control it, you can generate Bitcoin. This means that if you want to stop capital outflow, you can achieve it through Bitcoin mining."
- China's Mining Infrastructure Empire: National Security and Geopolitical Threats
In addition to mining itself, China's dominance in the manufacturing of Bitcoin ASIC mining equipment has raised concerns in the United States regarding national security and critical infrastructure.
Monopoly in Equipment Manufacturing: Recent research by Bitcoin solutions manufacturer Auradine found that over 95% of Bitcoin ASIC mining equipment is manufactured by Chinese companies such as Bitmain, MicroBT, and Canaan Creative.
National Security Threat: Auradine's report indicates that Chinese equipment manufacturing poses a significant threat to U.S. national security and critical infrastructure. Auradine's Chief Strategy Officer Sanjay Gupta stated that over one million Chinese-made Bitcoin mining machines with foreign firmware are connected to the U.S. power grid. "This poses potential severe cybersecurity risks to the power grids of multiple states. If software is embedded in these Chinese mining machines, once triggered, a coordinated cyber attack could cause a large number of machines to rapidly speed up or slow down simultaneously, potentially leading to catastrophic failures of the U.S. power grid."
51% Monopoly Risk: Gupta added that the supply of BTC mining hardware is highly concentrated, and in the event of deteriorating geopolitical conditions, the Bitcoin protocol may face a 51% monopoly risk. Recent tariffs imposed by President Trump on China could rise to 155% in the coming weeks, further exacerbating this threat.
- The Game of Hash Rate Between China and the U.S.: Threats and Challenges for Chinese Miners
Clearly, despite the ban, Bitcoin mining and production continue in China. So what does this mean for miners in regions where BTC mining is legal?
Challenges and Complexities: Gupta believes that the supply of mining equipment from Chinese companies will create complex situations for other regions. He said, "To address this issue, we need strong U.S. Bitcoin mining suppliers to drive continuous innovation and performance in the mining business."
Energy Response Technology: Gupta added that looking ahead, Bitcoin miners should have technology that can respond to energy demands, capable of quickly increasing or decreasing power consumption based on the needs of state or regional power grids.
Impact on the Global Network: Meanwhile, the architecture and historical legacy issues of Chinese mining may continue to cast a shadow over the global network. In the rapidly changing world of cryptocurrency, China has not disappeared but is operating on the fringes.
Conclusion:
Luxor's latest report reveals China's "underground empire" in Bitcoin mining and its role as the third-largest contributor in the global hash rate landscape. This not only questions the effectiveness of China's cryptocurrency ban but also highlights the high resilience and decentralized nature of the Bitcoin mining industry. However, China's monopoly position in ASIC mining machine manufacturing has also raised concerns in the U.S. regarding national security and geopolitical risks, escalating the game between China and the United States in the field of Bitcoin hash rate. In the future, the development of the Bitcoin mining industry will not only be a competition of technology and markets but also a multidimensional game among countries in regulation, security, and geopolitical aspects.
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Original Article: “China's Ban Ineffective? Luxor Report: China is the World's Third-Largest Contributor to Bitcoin Mining”
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