BTC’s Energy Consumption Has Nosedived Since China’s Mining Crackdown
2 min read
BTC’s energy consumption has halved since China’s crackdown on crypto mining, according to Cambridge University’s BTC Electricity Consumption Index.
Currently, BTC consumes 68 terawatt-hours (TWh) of electricity per year. TWh is a measurement that tracks a unit of energy equal to outputting one trillion watts for one hour—and it’s used to track the annual energy consumption of entire countries.
Earlier this year—before China’s crackdown on BTC mining really began to bite—BTC was consuming up to 130 TWh, placing it comfortably among some of the world’s leading countries by energy consumption.
Specifically, the BTC network’s energy consumption has fallen by 51% since May 10, from an all-time high of 141 TWh to 68 TWh.
“It’s also telling that we have seen an increase in Chinese-linked mining entities selling BTC since this began, almost certainly due to the costs of relocation,” Jason Deane, BTC analyst at Quantum Economics, told Decrypt.
China’s ban on BTC mining
China has come down hard on the BTC mining industry throughout 2021.
At the end of February 2021, Inner Mongolia released plans for reducing energy consumption. Those plans included closing down BTC mining facilities. By April 2021, those plans had been enacted and BTC mining was no longer legal in Inner Mongolia.
After Inner Mongolia banned BTC mining, other Chinese provinces including Qinghai, Yunnan, and Xinjiang, followed suit.
Earlier this month, Sichuan ordered energy companies to cut power to BTC mining farms across the province, causing the hash rates of some of the biggest mining pools to plummet by as much as 37%.
Historically, China has controlled approximately two-thirds of the BTC mining hash rate, so the crackdown on mining farms has inevitably made a dent in the network’s energy consumption.
What does this mean for BTC?
In the short term, BTC’s drop in energy consumption lessens the network’s impact on the environment.
At its 2021 peak of 141 TWh, the BTC network’s carbon footprint was greater than 60 billion pounds of burned coal, or 9 million homes’ average electricity consumption for the year. Since the drop in BTC’s energy consumption has since fallen by over 50%, so too will the network’s immediate impact on the environment.
However, the dip in BTC’s carbon footprint is likely to be short-lived. Since China’s crackdown, many BTC miners are relocating to other jurisdictions.
For example, BTC mining firm BIT Mining—which previously operated in China—has already delivered its first batch of mining machines to Kazakhstan.
