21 Jul 2021 9:46 AM +00:00

Bitcoin Mining Has Become Greener After China's Crypto Mining Crackdown, According To Reports

Bitcoin mining is now causing less environmental damage following China's latest wave of restrictions against the practice, according to data.

As reported by CNBC, data from Cambridge University highlights that China's new regulations of cryptocurrency mining have seen the country's proportion of the global hashrate decrease.

Indeed, the latest hashrate data suggests this may have had a larger impact than what Cambridge University suggests.

China's Bitcoin Mining Wavers

After reaching a peak of 180,666,000 TH/s in May 2021, the global hashrate dropped by over 50% to a low of 84,790,000 TH/s in early July. It has since increased to over 100,000,000 TH/s.

Alongside this, the total electricity consumption dropped from an estimated 130TWh to 71.62 TWh, as of July 20.

This came after China's State Council announced in May it would take a firmer stance on bitcoin mining, leading various Chinese provinces to issue notices against unauthorised uses of energy for mining.

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As a result, Chinese miners have either opted to sell their ASIC mining equipment or seek out alternative locations for their venture.

Given the low cost of electricity, many of these have opted to move to the United States - specifically Texas.

Described by Governor Greg Abbot as a "Mecca For Bitcoin Miners", Texas has historically relied on its large fossil fuel reserves, but has more recently seen an increase in renewable energy stores - especially in wind energy.

According to Cambridge University's Bitcoin Electricity Consumption Index, the US was responsible for 16.8% of all bitcoin mining in April. This has likely increased dramatically in the past few months, at the expense of China's share.

As such, both the decreased global hash rate and the move to alternative markets may have given bitcoin a slightly greener footprint.

However, bitcoin mining still remains a large burden on the world's energy consumption, even with an increased use of renewable energy. While it may have dropped from consuming as much electricity in a year as Argentina, its 71.62 TWh still put bitcoin mining near the total consumption of Colombia.

A total of 11.7% of the world's electricity is generated from renewable sources. Kazakstan, for example, is another haven for Chinese bitcoin miners, but has a lower proportion of renewable energy consumption than both China and the US.

Bitcoin's energy consumption has been a key concern for some time now, brought further into the limelight by Elon Musk's announcement that Tesla would no longer accept the cryptocurrency due to environmental concerns.

Read More: Bitcoin Taproot Upgrade: When Will It Happen?

[Featured Photo by Executium on Unsplash]