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China’s share of global use of electricity for bitcoin mining fell by half for the first time this April, while Kazakhstan has catapulted to third place as its share of mining s ‘has multiplied by six.
According to data from the Cambridge Center for Alternative Finance, China’s global hashrate, the computing power needed to extract new bitcoins, fell from 75% to 46% of the global total between September 2019 and April 2021. The month Next, Beijing intensified its repression on the energy-intensive industry, which it has tried to reduce for almost a decade.
The data also provide the first clear look at the seasonal migration of Chinese cryptographic miners from Xinjiang, in the west, which depends mainly on coal plants, to the southern regions of the country to harness cheap hydropower during the season. of rain.
The expulsion of miners from China makes it difficult to track electricity consumption, however, as many new mining operations involve private agreements with off-grid power plants.
“I think [that growth] makes things even more complicated than they used to be, “said Michel Rauchs, CCAF’s leader in digital assets. [mining] it could go anywhere, there is no way to track it unless you communicate with the source “.
While proponents of cryptocurrencies claim that greener currencies are possible, Elon Musk, Tesla’s chief executive reversed his support for bitcoin in May for electricity consumption, eliminating billions of cryptocurrencies and earning the wrath of millions of investors.
“It’s important to know that bitcoin miners are highly encouraged to develop and use the most economical and efficient energy,” said Perianne Boring, founder and president of the Digital Chamber of Commerce, a blockchain advocacy group and of the cryptocurrency.
But in places like Kazakhstan, the growing crypto mining industry is based primarily on fossil fuels, which last year generated about 90 percent of the country’s electricity, according to the U.S. Department of Commerce.
“We see this additional demand [for electricity] it is fulfilled by extending the useful life of the old power plants or completely restoring the plants that were deactivated because they were no longer profitable ”, said Rauchs.
In the United States, the second largest mining country, with 16.8% of the world’s hashrate, some mines are based on fossil fuels. In upstate New York, privately held company Greenidge Generation Holdings converted a coal-fired natural gas plant in 2017 to exploit bitcoins, pledging to use carbon credits to offset its activities.
Cambridge data also shows how long Chinese miners will go in search of cheap electricity, moving server farms to trucks to take advantage of cheap hydroelectric power in the Sichuan region during the rainy season. During this period, the province’s share of electricity consumption for bitcoin mining increased from 15% to more than 60% of China’s hashrate. At the same time, the coal-based mining hashrate in Xinjiang fell from 55% to less than 10%.
The examination of the electrical energy used to generate cryptocurrencies from environmentalists is not new. CCAF’s Bitcoin electricity consumption index suggests that bitcoin mining globally consumes 8 gigawatts a day, or 70 terawatts of electricity a year if levels were consistent, slightly more than annual consumption. of Austria.
These numbers can change drastically, in line with bitcoin prices. In early April, annual consumption estimates reached 130.03 terawatt hours, while bitcoin prices peaked.
Consumption peaked at a record 141.28 terawatts of electricity in early May, as prices rose again, before falling as Musk tweeted his concern about the impact of digital assets on the natural environment.
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