China’s share of global bitcoin electricity consumption drops by less than half

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China’s share of global electricity consumption for bitcoin mining fell to less than half for the first time in April, while Kazakhstan catapulted to third place as its share of mining has increased sixfold.

China’s global hashrate, the computing power required to mine new bitcoin, rose from more than 75% to 46% of the global total between September 2019 and April 2021, according to data from the Cambridge Center for Alternative Finance. The following month, Beijing stepped up its crackdown on the energy-intensive industry, which it has been trying to curb for nearly a decade.

The data also provides a clear first glimpse of the seasonal migration of Chinese crypto-miners from Xinjiang to the west, which relies mostly on coal-fired power plants, to the southern regions of the country to take advantage of cheap hydropower during the rainy season.

The expulsion of the miners from China, however, makes it more difficult to track electricity consumption, 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 Assets at CCAF. “The [mining] could go anywhere, there is no way to track it unless you communicate to the source.

As cryptocurrency advocates argue greener coins are possible, Tesla chief executive Elon Musk canceled support for bitcoin in May for its electricity consumption, causing crypto markets to lose billions of dollars. and drawing the wrath of millions of investors.

“It’s important to know that bitcoin miners have a strong incentive to develop and use the most economical and efficient energy,” said Perianne Boring, founder and chair of the Digital Chamber of Commerce, an advocacy group blockchain and cryptocurrency.

But in places like Kazakhstan, the growing crypto mining industry relies primarily on fossil fuels, which generated nearly 90% of the country’s electricity last year, according to the U.S. Department of Commerce.

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“We see this additional demand [for electricity] is achieved by extending the life of old power plants or by completely re-establishing plants that were dismantled because they were no longer profitable, ”said Rauchs.

In the United States, the second largest mining nation, with 16.8% of the world’s hashrate, some mining is based on fossil fuels. In upstate New York, private equity firm Greenidge Generation Holdings converted a coal-fired power plant to natural gas in 2017 to mine bitcoin, pledging to use carbon credits to offset its activities. .

Cambridge data also shows how far Chinese miners will go in search of cheap electricity, relocating server farms by truck to take advantage of cheap hydroelectric power in the Sichuan region during the rainy season. During this period, the province’s share of bitcoin mining electricity consumption rose from 15% to over 60% of China’s hashrate. At the same time, the hash rate of mainly coal-fired mining in Xinjiang has dropped from 55% to less than 10%.

The scrutiny by conservationists of the electricity used to generate cryptocurrencies is nothing new. The CCAF Bitcoin Electricity Consumption Index suggests that global bitcoin mining consumes 8 gigawatt hours per day – or 70 terawatt hours of electricity per year if the levels were constant, slightly more than the annual consumption of the world. ‘Austria.

However, these numbers can change dramatically depending on bitcoin prices. In early April, annual consumption estimates hit 130.03 terawatt hours as bitcoin prices peaked.

Consumption hit an all-time high of 141.28 terawatt-hours of electricity in early May as prices rallied again, before plunging when Musk tweeted his concern about the impact of the digital asset on the environment.

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