China was named one of those countries where the concept of Bitcoin was adopted rapidly. It was also considered the Bitcoin mining capital of the world. But then the country named all these Bitcoin transactions illegal and put an end to Bitcoin trading by the end of September 2021.
Now that China has banned its use, the United States has now become the leading miner with the largest share in Bitcoin mining. Let’s talk more about why China banned Bitcoin, one of the largest cryptocurrencies.
Why Did China Ban Bitcoin?
One of the reasons reported by China is the fact that the country wants to reduce carbon emissions to meet climate change goals. You might be wondering how are two related, right? Let’s see!
The mining procedure is not simple. Countries become miners when they create new bitcoins, which require a lot of electricity and contribute to global carbon emissions resulting in an increased effect of greenhouse gases.
The energy consumption of Bitcoin has increased as a result of China’s ban, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI). The country uses 0.45% of the world’s electrical production.
Who Are the Current Leading Bitcoin Miners?
According to the most recent data on countries contributing to the global mining, the United States is in first place with 35.4%, followed by Kazakhstan with 18.1$ and Russia with 11%. China’s decline as a bitcoin miner has come as a complete surprise. While on the other hand, if we talk about Kazakhstan, which has recently joined Bitcoin trading, increased its use of crypto mining since April 2021, according to research.
However, as the number of countries adopting bitcoin mining is increasing, so is the electricity shortages in many areas to compensate for the decline in mining.
How Did China Cater To Energy Expenses?
CBECI also revealed in research that China is responsible for 75% of Bitcoin mining due to its exceptionally low electricity costs. Mining Bitcoins demands a lot of computing power. As a result, they applied the technique to finding low-cost electricity in various regions.
During the summer, when it rains, miners go to a hydropower plant to acquire energy, which is available in large quantities. In order to meet the standards, the local administration was forced to make electricity as cheap as a penny.
Now that the lead has gone to the United States, they should use the same strategy to obtain energy from low-cost sources as China. Washington is home to dozens of cryptocurrency miners. It also provides electricity through hydropower, which is less expensive than other sources.
Kazakhstan is the third most popular country on the list. The Bitcoin mining industry is rapidly evolving, and one factor to consider is its reliance on fossil fuels, which will have a significant environmental impact. According to the US Department of Commerce, 87% of Kazakhstan’s electricity is generated from fossil fuels.