China’s share of global bitcoin electricity use falls below half

China’s share of global electricity use for bitcoins extraction has fallen by less than half for the first time in April, while Kazakhstan has catapulted to third place since its share of exploitation is increased by six times.

China’s global hashrate, the computing power needed to mine new bitcoins, has fallen by more than 75 percent to 46 percent of the global total between September 2019 and April 2021, according to data from the Cambridge Center for and Alternative Finance. The following month, Beijing has intensified its crackdown on the energy-intensive industry, which has tried to limit itself for almost a decade.

The data also provide the first clear glimpse into the seasonal migration of Chinese crypto miners from Xinjiang in the west, which depends mainly on coal-fired plants, to the southern regions of the country to take advantage of hydroelectric power. good deal during the wet season.

The expulsion of miners from China makes it more difficult to track electricity use, however, as many new mining operations involve private deals with off-grid power plants.

“I think [that growth] makes things even more complicated than before, “said Michel Rauchs, head of digital activity at the CCAF.” [mining] could go anywhere, there is no way to follow the menu that is not communicated to the source ”.

While proponents of cryptocurrencies claim that greener currencies are possible, Elon Musk, Tesla’s chief executive, it shifted its support to bitcoin in May over its electricity consumption, wiping out billions of cryptocurrencies and gaining the wrath of millions of investors.

“It’s important to know that bitcoin miners are highly encouraged to develop and use energy more economically and efficiently,” said Perianne Boring, founder and president of the Digital Chamber of Commerce, a blockchain and cryptocurrency advocacy group. .

But in places like Kazakhstan, the growing cryptocurrency industry depends primarily on fossil fuels, which generated about 90 percent of the country’s electricity last year, according to the U.S. Department of Commerce. United States.

“We see that asking for more [for electricity] it is met by extending the life of old power plants or completely restoring plants that were put out because they were no longer profitable, ”Rauchs said.

In the United States, the second largest mining country, with 16.8 percent of the global hashrate, some mines depend on fossil fuels. In upstate New York, private equity firm Greenidge Generation Holdings converted a natural gas-fired coal plant in 2017 to exploit bitcoin, promising to use carbon credits to offset its activities.

The Cambridge data also show the lengths at which Chinese miners will go to look for bargain electricity, moving server farms via trucks to take advantage of bargain hydroelectric power in the Sichuan region in the wet season. During that period, the province’s share in bitcoin mining electricity consumption went from 15 percent to more than 60 percent of China’s hashrate. At the same time, the hashrate of primary coal mining in Xinjiang has fallen from 55 percent to less than 10 percent.

Bitcoin’s annualized electricity consumption line graph, TWh showing Electricity consumption for bitcoin extraction rises and falls with the price of the currency

The scrutiny of environmental advocates of the electricity used to generate cryptocurrencies is not new. The CCAF Bitcoin Electricity Consumption Index suggests that bitcoin mining worldwide consumes 8 gigawatt hours per day – or 70 terawatt hours of electricity per year if levels were consistent, slightly higher than Austria’s annual consumption. .

Those numbers can change dramatically, in line with bitcoin prices. At the beginning of April, estimates for annual consumption reached 130.03 terawatt hours when bitcoin prices peaked.

Consumption reached a record high of 141.28 terawatt hours of electricity in early May as prices rose again, before falling as Musk tweeted his concern about the impact of digital assets on to the environment.

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