Bitcoin Mining’s Electricity Consumption Has Doubled in First 3 Quarters in China
Chinese authorities’ effort to curtail cryptocurrency mining seems to fail. From January to September, the electricity consumed by bitcoin mining has experienced a considerable increase in the country, according to a report from National Business Daily.
China’s electricity consumption soared in this year to September fueled by greater demand from residents and the thriving service sector including bitcoin mining industry.The National Energy Administration claimed at a press release on Wednesday that electricity consumption, which is considered as an important economic indicator, increased by 8.9 percent year-on-year in the first three quarters, the fastest growth rate in 6 years and 2 percentage points higher than a year earlier.
China used up to 516.1 billion kWh of electricity during the period. The tertiary industry and residential electricity consumption maintained a relatively high growth rate, while the energy consumption of data center and bitcoin mining has doubled.
China currently control over 70 percent of bitcoin’s mining power, which has rattled President Tump’s White House. The monopolization of the hash power used to mine the world’s most popular cryptocurrency also drives up the country’s energy consumption because bitcoin’ mining involves an energy intensive process of solving complicated math problems to add new transactions to the blockchain network.
Most of China’s bitcoin mining pools are located in regions rich in coal or hydroelectric power, including Xinjiang, Inner Mongolia, Sichuan and Yunnan. Electricity costs in these selected places are lower than the national average. But bitcoin mining’s daunting energy consumption raises eye brows from Chinese regulators.
Earlier this year, the country’s top internet-finance regulator, the Leading Group of Internet Financial Risks Remediation, instructed local governments to “actively guide” companies in their respective regions to orderly exit the cryptocurrency mining industry following concerns of excessive electricity consumption and financial risk. However, the initiative has little impact. Local governments driven by economic incentives still welcome big mining firms running in their localities. This helps explain the increasing electricity consumption from bitcoin mining in China.
But Beijing’s hostility to cryptocurrencies has pushed some big mining pools to move their operations abroad, with the Canadian province of Québec and Iceland as the ideal destination where is known for advertised cheap electricity and friendly attitudes towards cryptocurrencies.