Daniel Batten did an analysis based on publicly available information to avoid criticism, confirming the impact of the amount of renewable energy. The owner of a China-based Bitcoin mining operation said that widespread Bitcoin mining in China uses hydro and solar power.
The Bitcoin Mining board has reported a significant increase in the use of renewable energy after China banned cryptocurrencies. Some people have called them into question because they only rely on self-reported data.
Climate tech investor Daniel Batten did an analysis based on publicly available information, statistics, and news to avoid criticism. That way, he sought to confirm the impact of the amount of renewable energy the Bitcoin network uses.
In case of uncertainty, he assumed the worst-case scenario of increased fossil fuel use. He only found a 10.9% increase in the use of renewable energy on the Bitcoin network.
There Have Been Wrong Reports on Bitcoin Mining
According to some reports in The New York Times, Bitcoin mining had turned less green. However, they relied on a single study containing major flaws like the ones below.
They wrongly analyzed the net hash power change and the renewable energy mix before and after the ban in China. In addition, they did not consider the 47-fold reduction in mining in Iran, combined with the 4-fold growth in mining in Canada.
The study also included information accurate at the time that has changed, like the migration of miners to Kazakhstan.
An Analysis of Bitcoin Mining Using Updated Information
According to Daniel Batten, the ban on Chinese cryptocurrency mining was a ban on fossil fuel energy. He pointed out that the Asian country now largely contributes to using green energy for that activity.
Two separate sources indicate that the Chinese global hash rate is still above 20%. Cybersecurity Qihoo360 and the University of Cambridge estimate that 21.1% of mining has occurred in China since January.
The owner of a China-based Bitcoin mining operation confirmed widespread Bitcoin mining in China using hydro and solar power. He said the ban had eliminated all carbon-based Bitcoin mining conducted for nine months of the year.
Bitcoin Mining Stopped Using Carbon for Nine Months
Many believe that Chinese mining companies use hydropower for six months of the year and coal for the other six months. However, that is wrong, as Bitcoin mining companies have used low-cost hydroelectric power only during the humid summer months.
Sudden heavy rains generate more capacity than hydroelectric stations can find customers. Bitcoin miners would only use that energy, which would otherwise become waste.
China had almost half of the Bitcoin network using hash power before the ban. That situation made the entire Bitcoin network 30% more fossil fuel-based.
Kazakhstan Has Not Become the Crucial Factor Most Imagined
It is relevant to know that 99% of the Kazakh hash rate relies on fossil fuels. Therefore, a permanent transfer to Kazakhstan would have affected the use of green energy in Bitcoin mining.
The contribution of Kazakhstan to the global hash rate is shrinking to the level before the ban. On March 21st, Kazakhstan accounted for 7.4% of the hash rate worldwide, which rose briefly to 18.1%.
Kazakhstan has weathered a blackout fee of 1-2.5c/KWh on cryptocurrency mining, and the authorities have seized 67,000 illegal mining machines. It also lost 202 MW of power in a single raid of 13 mining sites.
By Alexander Salazar
