Chinese bitcoin mining has almost totally ceased because the government restricted cryptocurrency use in-may, meaning a lot of this activity has moved elsewhere – including to Kazakhstan, where fossil fuels, including coal, produce more than 90 per cent of the nation’s electricity supply.
Bitcoin uses network of computers referred to as miners that resolve mathematical problems to secure the currency, consuming vast levels of electricity along the way. Data from the Cambridge Centre for Alternative Finance (CCAF) demonstrates the previously rapid investment in new bitcoin mining plants stopped in China from September 2019 to April 2021 in anticipation of the ban.
China’s share of global bitcoin mining power declined from 75.5 % to 46 per cent over the period, while the existing miners remained static in size and waited for news. During the same period the global mining share of Kazakhstan rose from just 1.4 % to 8.2 %, catapulting it to third place after the US.
Bitcoin has faced growing criticism for its impact on climate change and a growth in Kazakhstan mining is likely to further that narrative as the united states is heavily reliant on fossil fuels. Kazakhstan was the world’s ninth major producer of coal in 2018, according to International Energy Agency data. In that same year, 70 % of its electricity was produced from coal power, and 20 per cent from gas. Renewables made up only one 1.4 per cent of the country’s energy supply.
State energy supplier KEGOC didn’t react to a obtain interview about how exactly it plans to ramp up supply to meet up demand, though in 2013 the united states set an objective of producing 50 % of its energy from sources apart from coal or oil, including gas, nuclear and renewable energy, by 2050.
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The CCAF data implies that US mining also grew over the same period, from 4.1 % of global share to 16.8 %, putting it in second place. Only 11 per cent of the united states electricity supply is from renewable sources. The analysis is collated from data given by four mining pools that together represent 37 per cent of total global mining.
The Chinese ban has shaken up the whole sector, with CCAF data showing that over fifty percent of miners worldwide have stopped operating. The complete network was estimated to be using 132 terawatt-hours of energy in mid May but this plummeted to 59 TWh in early July.
“It’s quite safe to state that there is hardly any activity left in China,” says Michel Rauchs at the CCAF. “Now the big question is where is that truly going.”
Peter Wall at mining company Argo says that he’s seeing a “gold rush” of Chinese miners seeking to move their redundant equipment and create in america, and seeking renewable energy sources.
“They left China partly because they were associated with coal and dirty power. They’re aware that the most permanent sustainable kind of mining is to use renewable power,” he says. “If you’re a miner, the matter that keeps you up during the night, the thing that gives you nightmares, is having machines sitting in storage not mining.”
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