According to Cambridge BTC Electricity Consumption Index BTC energy consumption has halved since the Chinese cryptocurrency operation.
BTC energy consumption has fallen sharply
BTC currently consumes 68 terawatt hours (TWh) of electricity. TWh is a measurement that monitors a unit of energy equal to the output of one trillion watts for one hour – and is used to monitor the annual energy consumption of entire countries.
At the beginning of this year – before the Chinese intervention against BTC mining came – BTC consumed up to 130 TWh, which conveniently ranked it among some of the world’s leading countries in terms of energy consumption.
Specifically, the energy consumption of the BTC network has fallen by 51% since 10 May, from a historic high of 141 TWh to 68 TWh. BTC now accounts for 0.27% of global energy consumption.
Chinese ban on BTC mining
In 2021, China took strong action against the BTC mining industry.
At the end of February 2021, Inner Mongolia published plans to reduce energy consumption. These plans included the closure of BTC farms. By April 2021, these plans had been accepted and BTC mining in Inner Mongolia was no longer legal. After Inner Mongolia banned mining, other Chinese provinces followed Qinghai, Yunnan and Xinjiang.
Earlier this month, Sichuan ordered energy companies to cut off power to BTC mining farms across the province, causing the hashrate of some of the largest mining pools to fall by as much as 37%.
Historically, China controlled about two-thirds of the hashrat of the BTC network, so action against mining farms inevitably caused a reduction in grid energy consumption.
What does this mean for BTC?
In the short term, a decrease in BTC’s energy consumption reduces the network’s impact on the environment.
At its peak in 2021, 141 TWh, the network’s carbon footprint was more than 60 billion pounds of coal burned, an average electricity consumption of 9 million households per year. As BTC’s energy consumption has fallen by more than 50% since then, the network’s immediate impact on the environment will also decrease.
However, the decline in BTC’s carbon footprint is likely to be short-lived. Since the Chinese operation, many primary cryptocurrency miners have moved to other jurisdictions. For example, the BTC mining company BIT Mining – which previously operated in China – has already delivered its first batch of mining machines to Kazakhstan.
“This also reflects the fact that we have seen an increase in China-related mining companies selling BTC, almost certainly due to relocation costs,” said Jason Deane, BTC analyst at Quantum Economics.