China Shuts Down Bitcoin Mining
The world of cryptocurrency mining experienced major upheaval this year when China imposed a nationwide ban on the practice. In less than a year, Beijing went from being home to a majority of the world’s bitcoin mining to none of it.
The Communist Party of China sees energy-hungry crypto-mining not just as a pollutant, but also as a potential challenge to its command over the nation’s economy. Under President Xi Jinping, state capitalism has seen a resurgence and Beijing is rolling out its own digital yuan. The cryptocurrency mining ban represents a loss in an estimated $6 billion in annual revenue, according to digital asset researcher Christopher Bendiksen.
America and Kazakhstan: Rising Bitcoin Mining Powers
Beijing’s ban on bitcoin mining sent business elsewhere. And the biggest beneficiary has been the United States. Bitcoin mining is rising in Texas and upstate New York, where dormant coal power plants in old industrial cities are being converted to natural gas to power energy-hungry cryptocurrency mining operations.
The powerful machines that power cryptocurrency mining require cheap, reliable electricity and space. Sparsely populated areas in the United States where hydroelectric or wind power is abundant are attractive locations for bitcoin mining. Cheap, pollutive coal power is also driving a surge in cryptocurrency mining in Kazakhstan. But the rapid rise there might not last long as it is contributing to energy shortages in the Central Asian country.
Is Green Cryptocurrency Mining The Future?
Bitcoin mining is an energy hog. It currently uses more electricity than all of the Philippines, according to a University of Cambridge study. But some industry professionals see a more complicated story.
Bitcoin mining, they say, can absorb excess energy from intermittent power sources or waste gas. In other words, it could use power that would have been otherwise wasted. But renewed pressure from climate change activists could see a push for clean or green crypto mining with future growth in countries with large geothermal, hydroelectric, or wind power sources.
How is Bitcoin Mining Performance Measured?
The performance of mining of bitcoin and other cryptocurrencies is measured by hash rate (or hash power).
A hash rate is a measurement of the computational power per second used by a network to mine and process transactions. (For example, a trillion measurements per second or 1TH/s.) A higher hash rate usually means higher profits for crypto miners.
The Top Eight Bitcoin Mining Countries By Hash Rate Share
These are the world’s largest bitcoin mining countries (by average monthly hash rate share) as of October 2021, according to the Cambridge University Center for Alternative Finance.