The Chinese share of Bitcoin mining’s global usage of electricity fell below half for the first time in April.
However, Kazakhstan’s usage has jumped six-fold to become the third-biggest consumer of crypto energy in the world, while China’s global hash rate fell to 46% in the period between September 2019 and April 2021.
According to the Cambridge Centre for Alternative Finance, this data offers a good outlook at the migration of the Xinjiang miners from the west to the southern parts of the country where there is a monsoon season, meaning hydropower is much cheaper.
Chinese authorities have ordered cryptocurrency miners in Sichuan province to shut down their operations. During the monsoon season, Sichuan’s share of electricity consumption for Bitcoin mining grew from 15% to more than 60% of China’s total hash rate. By contrast, the hash rate of coal-fired mining in Xinjiang fell from 55% to less than 10%.
Michael Rauch, Head of Digital Assets at CCAF said it was almost impossible to track mining unless communicating directly with the source.
Brian Boring, founder and president of the Chamber of Digital Commerce – an advocacy group for blockchain and cryptocurrency – urged for more economical energy usage.
“It is important to know that Bitcoin miners are highly motivated to develop and use more economical and efficient energy,” he said.
Kazakhstan’s consumption on the rise
Meanwhile, in Kazakhstan, the crypto mining industry is constantly rising and is dependent on fossil fuels. Kazakhstan was the world’s ninth-largest coal producer and ranked 17th in the world for crude oil production.
Currently, almost 90% of the country’s electricity comes from fossil fuels.
Mr Rauch added there was a need for restarting Kazakhstan’s old plants that were previously closed because they weren’t profitable.
“We see this additional demand,” he said.
“It is met by extending the life of old power plants or restarting plants that have been completely decommissioned because they are no longer profitable.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.