Kazakhstan was, in its heyday, the the second longest Bitcoin mining nation on earth. Then, within a year, he capitulated. While major news commentators were quick to pick out the reasons why Kazakh Authorities Turned Against Bitcoin Mining Operationsthe consequence this had on the greening of the network was not reported.
But because Kazakhstan is 87.6% powered by fossil fuels, less mining there means a greater mix of clean energy for the Bitcoin network.
How much higher?
That’s what I asked myself. And the answer I found was surprising.Font
At its peak in October 2021, Kazakhstan enjoyed 18.3% global hash rate.
But what has not been widely reported is that by January 2022 (the last time Cambridge University updated its bitcoin mining map), had already fallen to 13.2% of the global hash rate.
And that was before the real pressure on the miners came from the Kazakh authorities. This pressure came in three waves:
- Raid where equipment from 13 illegal mining farms was seized. It was estimated that the operations would be using more than 200 megawatts (MW) of power.
- A follow-up raid on the remaining known illegal mining activities that seized assets from 106 other mining operations.
- The regulated restriction of mining. Bitcoin mining can now only legally occur during off-peak hours of midnight to 8:00 am and on weekends– A reduction from 168 mining hours per week to just 64 mining hours per week.
Running some math, even at the most bullish upper threshold, Kazakhstan now accounts for 6.4% of the global hash rate at best.
So what does this mean for Bitcoin’s clean energy mix?
It makes a pretty significant difference, as you can see. The exodus from Kazakhstan changed the grid to become a majority user of clean energy. I ran a simulation on my power source model with Kazakhstan still at 18.3% of the global hash rate. This is what it would have looked like: majority use of fossil fuels.
Because Kazakhstan uses a lot of coal (a much heavier greenhouse gas emitter than natural gas), the difference in emissions is even more significant. At 18.3% full hash rate, Bitcoin emissions would have been 36 metric tons of carbon dioxide equivalent C (MTCO2e). But at current levels, emissions are only 32.4 MtCO2e. That’s a 10% reduction in emissions.
The ten percent reduction in emissions is significant. There are few industries in the world that have achieved this in one year. And if there was, you probably would have heard it all.
An important side note: have you ever seen a Bitcoin mining unit with its own internal combustion engine? Neither do I. Bitcoin mining, just like electric vehicles (EVs), uses electricity as a power source. As such, if an EV can claim zero emissions, then so can Bitcoin mining. So when we talk about emission, we are talking about the indirect emissions caused by the electricity component that was generated using fossil fuels.
In short: the Bitcoin network is still tracking in the right direction, but you have to dig to find out.
And some final thoughts on where we’re headed:
According to my model, the Bitcoin network uses 4.7% more clean energy now than just a year ago. The factors that have led to this are:
- The exodus from Kazakhstan
- migration of Marathon’s Remaining Coal Mining Toward Renewable Supply
- Continued migration to off-grid mining based primarily on renewables
This trend shows no signs of abating. Based on the trend line, the network is configured to use 4% more clean energy every year for the next three years.
To the best of my knowledge, this is the fastest rate of transition to renewables of any industry in the world.
This is a guest post by Daniel Batten. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
