The US is now the world leader in Bitcoin mining, as many countries restrict the “production” of cryptocurrencies either because they are too energy-intensive or because they can not control the digital currency. In 2020, China was the world leader (70%) in Bitcoin mining, but in 2021, after the Chinese government banned cryptocurrency mining, the United States came in first, with many states competing today to attract Bitcoin mining centers.
This sector – that is, the extraction of cryptocurrencies from computers by solving complex mathematical problems to verify Bitcoin transactions (transaction verification is the main goal, mining is the “reward”) – consumes, according to research, more energy than whole countries like Belgium, Argentina, Pakistan, and Poland. Due to high electricity consumption, many cryptocurrency mining companies have moved to countries where there is a lot of wind or solar energy, such as Norway and Sweden, but this choice in renewable energy sources is considered unsustainable because it deprives others of much clean energy activities.
The recent social unrest in Kazakhstan
Last May, the Chinese government banned the mining of cryptocurrencies in China. The activity has shifted to neighboring Kazakhstan, which has cheap energy and loose legislation, but has caused blackouts in the country, as well as in neighboring Kazakhstan and Kyrgyzstan, whose energy networks are connected to Kazakhstan, and this has contributed in part to the bloodshed. broke out in Kazakhstan a month ago.
The burden on China’s energy grid is one of the main reasons for the Chinese government’s ban. One-third of Bitcoin is mined worldwide in the United States today, while Kazakhstan’s share of 18% at the end of 2021 fell to 8% after the January riots and the multi-day internet shutdown imposed by the country’s authorities due to the protests. which disrupted cryptocurrency mining and drove cryptocurrency “mines” out of the country.
Restrictions on cryptocurrency mining
The fact that the US is becoming the global hub of Bitcoin mining is expected to have an impact on the already congested electricity grids of States, such as Texas, which is a leader in Bitcoin mining, but also on blackouts in the US, and will make it difficult to meet targets. Climate Change by President Joe Biden. Recently, the US Congress started a debate on how to make cryptocurrency mining greener: to turn to renewable energy sources or other cryptocurrencies, newer than Bitcoi, whose mining consumes less energy.
The current energy crisis has contributed to the restrictions imposed by countries on Bitcoin production. In early January the ban on Kosovo, which was attractive for Bitcoin mining because it had cheap electricity. In the EU, Sweden is leading the way in banning cryptocurrency mining for environmental reasons across Europe and has the support of Norway and Iceland, both countries popular for this climate activity.
Russia, the world’s third-largest Bitcoin miner, is focusing on Siberia due to low temperatures and access to cheap energy, and is considering banning the activity altogether, mainly because the state cannot control cryptocurrencies.
