Despite the ban, some miners in China are reaching into their bag of tricks to mine the cryptocurrency. Therefore, hydroelectric plants are a popular destination for exploitation.
In 2021 there was a veritable mass exodus of Chinese miners. Of course, this was due to restrictive government policies. Then the miners went to more crypto-friendly areas. Most of them ended up in North America or Central Asia. But not all miners have the capacity to simply set up their shop in another country. There is now growing evidence that many miners have stayed in China despite the ban and are using some form of alternative energy sources. According to a CNBC report, 20 percent of all mining activities are currently in China.
Apparently miners are making use of the many hydroelectric plants that exist in China. These are also much more difficult for the government to control than other energy producers. Chinese cybersecurity company Qihoo 360 recently released a report showing these activities. According to the report, there are 109,000 active mining IP addresses every day. Some of them try to disguise their activities using mining pools, according to the report.
Miners use VPN as a cloaking mechanism
Qihoo 360 also reports that miners occasionally install their programs on company terminals and servers to use their infrastructure. Data packets sent from Chinese data centers are encrypted to appear like normal Internet traffic to anyone monitoring the data exchange.
To find out about the illegal miners, the government relies on the help of the state-owned China Telecom. However, operators try to prevent the government from detecting them by using VPN. You benefit from the rainy season. This lasts from May to the end of autumn and always gives hydroelectric plants a high performance. Achievement that can then be used undetected by the hawk eyes of the state to mine the valuable cryptocurrency.