In April of this year, China’s share of global Bitcoin mining electricity consumption fell to less than half for the first time, while Kazakhstan’s share of mining increased six times, jumping to third place.
According to data from the Cambridge Alternative Finance Center, from September 2019 to April 2022, China’s global hash rate, that is, the computing power required to mine new bitcoins, dropped from more than 75% of the global total to 46%. The next month, Beijing intensifies its crackdown For the past ten years, it has been trying to cut energy-intensive industries.
These data also clearly reveal for the first time the seasonal migration of Chinese crypto miners from Xinjiang, which relies mainly on coal-fired power plants, to the southern part of the country in order to use cheap hydroelectric power during the rainy season.
However, expelling miners from China makes it more difficult to track electricity consumption, as many new mining operations involve private transactions with off-grid power stations.
“I think [that growth] Michel Rauchs, head of digital assets at CCAF, said that this makes things more complicated than before. “This [mining] You can go anywhere, unless you communicate at the source, you cannot track it. “
Although cryptocurrency advocates claim that greener coins are possible, Elon Musk CEO of Tesla, In May of this year, he changed his support for Bitcoin due to electricity consumption, causing the cryptocurrency market to lose billions of dollars and angering millions of investors.
“It is important to know that Bitcoin miners are highly motivated to develop and use the most economical and efficient energy sources,” said Perianne Boring, founder and president of the Digital Chamber of Commerce, a blockchain and cryptocurrency advocacy organization.
But according to data from the US Department of Commerce, in Kazakhstan and other places, the growing crypto mining industry mainly relies on fossil fuels. Last year, nearly 90% of the country’s electricity came from fossil fuels.
“We see additional demand [for electricity] It can be met by extending the life of old power plants or completely restoring power plants that have been decommissioned because they are no longer profitable,” Rauchs said.
In the United States, the second largest mining country with 16.8% of the world’s computing power, some mining industries rely on fossil fuels. In upstate New York, private equity firm Greenidge Generation Holdings converted a coal-fired power plant to natural gas to mine Bitcoin in 2017, and promised to use carbon credits to offset its activities.
Cambridge data also shows the efforts of Chinese miners to find cheap electricity, using trucks to move server farms to take advantage of cheap hydropower in the rainy season in Sichuan. During this period, the province’s share of electricity consumption for Bitcoin mining rose from 15% of China’s computing power to more than 60%. At the same time, the computing power of Xinjiang’s coal-powered mining industry dropped from 55% to less than 10%.
Environmental advocates’ scrutiny of electricity used to generate cryptocurrency is not new. The CCAF Bitcoin Electricity Consumption Index shows that global Bitcoin mining consumes 8 GWh per day-if the level is the same, it consumes 70 TWh every year, slightly higher than the annual consumption in Austria.
However, these numbers may change drastically with the price of Bitcoin. In early April, as the price of Bitcoin peaked, the annual consumption is expected to reach 130.03 TWh.
In early May, as prices rose again, consumption reached a record high of 141.28 terawatt hours, and then plummeted as Musk expressed his concerns about the environmental impact of digital assets on Twitter.