Bitcoin miners use an estimated 348 terawatt hours of electricity per year, and with the world increasingly moving to renewables, some are asking the question: just where does Bitcoin get its electricity?
To answer that question, Visual Capitalist's Chris Deckert partnered with HIVE Digital to visualize data from the Cambridge Centre for Alternative Finance and Ember, a climate-oriented energy think tank, to look at the Bitcoin network’s electricity mix.
This is part one in our How Green is Bitcoin? series, which examines the cryptocurrency’s sustainability.
The World According to Bitcoin
The top 10 countries for Bitcoin mining represent 93.8% of the entire network by hashrate—a measure of computational power—with the U.S., China, and Kazakhstan rounding out the top three. Together these three countries hosted nearly three-quarters of the network at the end of 2021.
Source: Hashrate (%): Cambridge Centre for Alternative Finance as of December 2021; Renewable (%) Ember, as of 2022.
China used to be the top spot for Bitcoin mining, up to 75% of global capacity, but a crackdown in the summer of 2021 saw their share drop to nil in just a couple months. Many miners relocated to nearby Kazakhstan, attracted by cheap electricity, loose regulations, and a ‘stable’ political climate, while others opted for the United States. A sizable covert mining scene has also emerged in China, now that the dust has settled.
At the bottom of the top 10 are Ireland, Singapore, and Thailand, which together host 4.9% of the network. Ireland’s reported share—and this applies to sixth-place Germany, as well—is thought to be a significant overstatement caused by miners in other countries masking their true locations.
The Role of Renewables
On a national basis, the U.S., China, and Kazakhstan each had renewable shares of 22.5%, 30.2%, and 11.3% respectively. For context, renewables made up 30% of the world’s electricity generation in 2022 (not including nuclear).
Kazakhstan’s dismal renewable share is due to their heavy reliance on coal (60%), which is also a major export of the central Asian country. At the same time, coal contributes a similar amount of the electricity in China (61%), but their overall renewable share is higher because of their breakneck expansion of wind and solar power.
Wagons Ho?
Just where a Bitcoin miner sets up their rig is important, because unlike many other industries with factories or big head offices, they are mobile (Google ‘Bitcoin mining shipping containers’ if you need convincing).
Where they choose to put out their shingle is based on things like the regulatory regime, price of electricity, and because Bitcoin rigs generate a lot of heat, the average outdoor temperature. On this last point, here is how the top 10 breaks down by mean annual temperature:
Increasingly, though, with climate change driving the push to renewables, many Bitcoin miners are looking more closely at where their electricity is coming from. This could be why Canada—with its embarrassment of hydroelectric riches—has crept up the ranking from less than one percent of the network in 2019, to six-and-a-half percent at the end of 2021.
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But considering that top renewable countries such as Iceland, Paraguay, and Norway together only hosted just over one percent of the global network, there’s still a lot more room left for growth.
By Zerohedge.com
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