A new study by the Cambridge Bitcoin Electricity Consumption Index (CBECI) finds that China’s proportion of worldwide Bitcoin mining has essentially fallen to zero.
Mining was banned after Chinese authorities urged banks to stop facilitating transactions.
More than three-quarters of all Bitcoin mining took place in China in Sept. 2019.
According to CBECI, China’s mining crackdown originally resulted in a 38% drop in global mining output.
A 20% “bounceback” in July and August, however, “suggest[ing] that some Chinese mining equipment has successfully been redeployed overseas,” experts claimed, partially negated this effect
Even though the period covered by the Cambridge study was past, China has since proclaimed all Bitcoin transactions to be illegal.
Mining creates new Bitcoins, which pay the miners, but the computational power required to do so uses a significant amount of energy each day.
As a tradeoff for the chance to obtain Bitcoin, they examine every transaction.
As a result, worldwide mining necessitates massive amounts of computational power, which in turn consumes tremendous amounts of electricity.
Using data from some commercial Bitcoin mining pools, Cambridge Centre for Alternative Finance’s CBECI monitors how much computing power is being used to mine cryptocurrencies in different parts of the world.
According to the most recent data, which covers the four months ending in August, the majority of Bitcoin mining (35.4 percent) is now based in the United States, followed by Kazakhstan (18.1 percent) and Russia (11%).
Because of China’s action in June and the subsequent decline in mining, the researchers say that Bitcoin’s energy consumption has decreased. However, as mining recovers, this decrease will reverse itself.
Global electricity consumption for bitcoin is estimated by the Cambridge group at 0.45% right now.
Scientists don’t know yet how the shift in geographic distribution will influence the balance of energy sources utilized to mine Bitcoin, whether fossil fuels or renewable sources.
That, they say, will be the subject of future analysis.
Mining with new energy sources
A study conducted earlier this year by CBECI indicated that China’s miners migrate every year, relocating from provinces where fossil fuel electricity is inexpensive to those with ample hydroelectric power during the rainy season.
Because of the ban, miners are forced to hunt for less expensive sources of electricity.
In the United States, much mining is done in states like Washington, where hydropower generates cheap electricity.
However, as reported, some Chinese miners have also shifted to Texas’ deregulated electrical infrastructure because of the low cost.
Kazakhstan’s expansion as a mining hub will have a negative impact on the environment.
At least 87% of Kazakhstan’s electricity is derived from coal.