China’s crypto ban could release more energy than Finland uses in a year Quartz

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China’s crackdown on cryptocurrencies came to a head on Friday with the announcement that all crypto-related activities would now be illegal. Reasons for China’s increasingly stringent crypto bans range from its role as a vehicle for money laundering and smuggling to environmental pollution and intensive electricity used in bitcoin mining. .

For years, China has been home to the largest share of bitcoin miners in the world. As of August 2019, bitcoin miners in China made up three-quarters of the world’s hashrate, a measure of crypto-mining activity. By March 2021, the last month for which the country’s data is available on Cambridge University’s Bitcoin Electricity Consumption Index, China’s share had fallen to 46% as the country tightened its restrictions on cryptography related activities. This summer, China’s aggressive application against mining caused cryptocurrency prices to plummet, and bitcoin miners ripped off their servers, put them in shipping containers, and scrambled to countries with cheap electricity and more welcoming regulatory environments, such as Kazakhstan and Texas, in the United States.

If China manages to completely eliminate bitcoin mining within its borders, it will release 86 terawatt-hours (TWh) of electricity, the amount of energy that Rystad Energy, an Oslo-based research firm, estimates. crypto miners in China used in 2020. That’s as much electricity that countries like Finland, Chile, the Philippines and Belgium each use in a year, or about as much as the 84 countries with the lowest electricity consumption in the world, combined.

Although data on China’s current energy consumption in bitcoin mining is not yet available, people on the ground suggest a sharp drop in mining activity. Kevin Zhang, vice president of Foundry Services, a digital asset mining company, gleaned a rough estimate of the impact on mining of the June crackdown.

Bitcoin mining accounts for just over one percent of China’s total electricity consumption, which Rystad Energy estimated at 7,510 TWh in 2020. Of the 86 TWh estimated to be used in bitcoin mining 63 percent came from coal power, mainly in Chinese provinces like Xinjiang. and Inner Mongolia. Decisive cryptocurrency mining ban on Friday comes amid widespread power cuts in China as more than 10 provinces, Bloomberg says, have restricted the use of electricity in order to meet targets reduction in energy intensity and emissions.

While recovering energy from the use of crypto can help China meet its national emissions reduction targets and reduce environmental pollution within its borders, the environmental benefits are likely to be short-lived. duration up to about the time it takes for crypto-miners to package their machines and set up in another country.

According to the Cambridge Bitcoin Electricity Index, global Bitcoin energy consumption has halved from over 125 TWh in May before China’s summer crackdown, to around 60 TWh as of June 30. Last Sunday, consumption had already risen to 98 TWh.

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