China’s ban on cryptocurrency mining has had a significant impact on the sustainability of Bitcoin (BTC). According to researcher Daniel Batten, the ban has extended the sustainability of bitcoin mining in just 20 months raised from 37.7% to 52.6%. This improvement is due to several factors worth investigating.
91% of new bitcoin hashrate is green
The first reason for this improvement is the durability of the new hashrate coming on the network. In the first two months of 2023, 91.3% of the new hashrate came from renewable energy sources. This means that the majority of new bitcoin mining capacity uses renewable energy sources such as wind and solar power.
The second reason for improving Bitcoin’s sustainability is the phasing out of fossil fuel-based mining equipment. Batten notes that 100% of the phased-out hashrate comes from fossil fuels.
The third reason for the improvement is the shift in global hashrate from China to the United States. Before the ban, miners in China used coal-fired power plants most of the year, replenishing hydropower only in the rainy season. This meant that mining in China was at most 41.6% sustainable. Mining in the US, on the other hand, is 52.8% sustainable. The move of the world hashrate to the US means more renewable energy sources will be used for bitcoin mining.
3/5 The new country with the ~1/2 the world’s hash rate (US) is more sustainable
Pre-ban, miners in China used coal plants most of the year, supplimenting with hydro only in the wet season (<5 mths)
Mining in China: at most 41.6% sustainable
Mining in US: 52.8% sustainable pic.twitter.com/4ANX3t3loR— Daniel Batten (@DSBatten) March 8, 2023
BTC mining Kazakhstan weakens
The fourth reason for the improvement is the drop in hashrate in Kazakhstan. Fossil fuel-based mining in Kazakhstan accounted for 11.4% of the pre-ban hashrate. With the exodus of miners from that country, the current estimate is still 6.44%.
Finally, the global electricity grid is slowly becoming greener. Each year, all 100% electrified technologies on the grid, including bitcoin mining, become 2% more sustainable simply because there is more renewable energy on the grid.
The combination of these factors means that bitcoin mining is becoming more sustainable, Batten said. This trend is likely to continue as more miners adopt renewable energy sources. Batten notes that now more than 1% of the network is powered by flared gas mining, which is another step towards greater sustainability.
This article was created with the help of AI. For this article, the editor-in-chief worked closely with AI to obtain the best factual information. The editor-in-chief asked specific questions and checked the answers of the AI, supplemented them for relevance and corrected inaccuracies where necessary.