China’s share of global Bitcoin mining has fallen to effectively zero, research by the Cambridge Bitcoin Electricity Consumption Index (CBECI) suggests.
In June China told banks to stop facilitating transactions, and issued bans on mining.
At its peak in Sept 2019 China accounted for over three quarters of all Bitcoin mining.
China’s crackdown initially led to a 38% fall in mining globally CBECI said.
However this was partially offset by a 20% “bounceback” over July and August, “suggesting that some Chinese mining equipment has been successfully redeployed overseas”, researchers said.
China has since declared all Bitcoin transactions illegal – though that occurred after the period covered by they Cambridge research.
Miners earn money by creating new Bitcoins, but the computing power needed to do it consumes large amounts of energy.
They audit Bitcoin transactions in exchange for an opportunity to acquire the digital currency.
Global mining requires enormous computing power, which in turn uses huge amounts of electricity, and consequently contributes significantly to global emissions.
The CBECI, which is produced by the Cambridge Centre for Alternative Finance, tracks the geographic distribution of computing power used for mining Bitcoin – receiving data from a number of commercial Bitcoin mining pools.
The latest data, which covers the four months to the end of August, suggests that most Bitcoin mining (35.4%) is now US based, with Kazakhstan (18.1%) second and Russia (11%) third.
China’s action in June and the resulting fall in mining will, the researchers say, have been reflected in a decline in Bitcoin’s energy consumption – but as mining recovers that fall will reverse.
Currently Bitcoin consumes 0.45% of global electricity production, the Cambridge group estimates.
The researchers do not yet know how the change in the geographic distribution will alter the mix of energy sources used to mine Bitcoin – whether fossil fuel or renewables.
That, they say, will be the subject of future analysis.
