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China’s Share of Bitcoin Mining Drops as Kazakhstan Soars to Popularity


cryptoknowmics.com 16 July 2021 03:15, UTC
Reading time: ~3 m

China’s crackdown on mining Bitcoin (BTC) and other cryptocurrencies has begun to take effect on the global distribution of mining capacity. According to Cambridge Centre for Alternative Finance, the country accounted for roughly 46% of the electric supply used for Bitcoin mining in April. During this period, Kazakhstan has emerged as the third-biggest player in the crypto mining scene, with a six-fold increase in its share of global BTC mining.

China’s Bitcoin Mining Capacity Plummets as Kazakhstan Becomes Popular With Miners

Research published by Cambridge on Thursday indicated that the much-anticipated diversification of the crypto mining industry is in progress after China implemented severe restrictions against miners this year. 

As a result of the ongoing mass exodus of BTC miners from China, its neighbor Kazakhstan is fast becoming one of the top contributors to the mining industry. The country’s share of Bitcoin mining has gone from a mere 1.4% in September 2019 to 8.2% in April. 

The US has risen to the second spot, with its mining share up from 4.1% to 16.8% in the same time period. While Russia and Iran stand at the fourth and fifth places respectively.

Mining Bitcoin or any other cryptocurrency is a highly energy-intensive process that involves solving complex mathematical puzzles. Also, unlike most cryptos, Bitcoin can only be mined using specialized computers — like ASIC miners — that are optimized to solve algorithmic problems. Still, the currency’s rising price has turned mining into a lucrative profession that is now part of an industry generating millions in revenue and selling necessary equipment to miners.

Bitcoin Mining and Its Impact on Environment

The burgeoning mining industry has drawn criticism for its harmful impact on the environment. Crypto mining activities in China have been especially condemned due to the country’s reliance on coal power. The last few months have seen local authorities in Xinjiang, Sichuan and Inner Mongolia suspend electricity supply to mining operations in a sign of hardening stance against the sector.

However, Cambridge researcher Michael Rauchs opines that its difficult to determine the contribution of different energy sources to Bitcoin mining. His data shows that hydropower-rich provinces like Sichuan witnessed a heavy influx of miners during the rainy season. Consequently, the overall mining power in China increased from 14.9% at the beginning of rains to 61.1% during peak season. At the same time, Xinjiang’s share plunged from 55.1% to 9.6%.

Bitcoin’s image as a futuristic asset has suffered a great blow in the last few months as more investors have prioritized sustainable and ethical models of business. In May, the primary cryptocurrency lost half its value after Elon Musk declared that Tesla would stop taking BTC payments until miners transition to green energy resources. Later in June, Musk tweeted that he would reconsider Bitcoin at Tesla if miners confirm sufficient usage of renewable energy.


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