Chinese Bitcoin mining power disappears overnight

Chinese Bitcoin mining power disappears overnight

According to research by the Cambridge Centre for Alternative Finance (CCAF), China’s mining power disappeared overnight as soon as the crackdown was enacted. It also shows that China’s share of global bitcoin mining has been in decline since 2019. 

An article published today by the BBC shows that “bitcoin mining is on the move”, following crackdowns by the Chinese government. It tells that China’s share of mining has fallen from 75.5% in September 2019 to 46% in April of this year. Further recent moves from various Chinese provinces will now make that figure a lot smaller. 

A significant amount of energy is consumed in order to create new bitcoins, this comes in the form of computing power, which in turn feeds on huge amounts of electricity. The CCAF Bitcoin Electricity Consumption Index puts bitcoin mining electricity consumption at almost equal to that used annually by Colombia. 

Data from the CCAF highlights that fact that bitcoin mining in China was already in decline far before the recent heavy crackdown in June. This crackdown came in the form of the authorities ordering banks and payment platforms to cease supporting cryptocurrency transactions. 

Once this edict had been enacted, it led to the already declining bitcoin mining power “"disappearing overnight, suggesting that miners and their equipment are on the move". 

It would appear that these miners are highly mobile. According to David Gerard, the author of “The attack of the 50 foot blockchain”: 

"Miners pack shipping containers with mining rigs, so that in effect they are mobile computer data centres, and they are now trying to ship those out of China". 

One place, highlighted by the BBC article, that has seen an almost 6-fold increase in bitcoin mining, is Kazakhstan. However, the energy source for the mining here is predominantly coal, an obviously very dirty source of energy. 

Kazakhstan is now third in the list of countries mining the most bitcoin, behind the US, which has significantly increased its share of bitcoin mining power to around 16.8%.  

Celsius Network recently announced a more than $200 million investment into bitcoin mining in North America. The investment makes the company one of the largest investors into bitcoin mining in the US, and Celsius has said that its investment will be into mining that uses only 100% of renewable and green resources. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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