Coal-powered bitcoin mining soars in Kazakhstan following Chinese ban
Chinese bitcoin mining has almost entirely ceased since the government restricted cryptocurrency use in May, meaning much of this activity has moved elsewhere – including to Kazakhstan, where fossil fuels, including coal, produce more than 90 per cent of the nation’s electricity supply.
Bitcoin relies on a network of computers known as miners that solve mathematical problems to secure the currency, consuming vast amounts of electricity in the process. Data from the Cambridge Centre for Alternative Finance (CCAF) shows that the previously rapid investment in new bitcoin mining plants stopped in China from September 2019 to April 2021 in anticipation of the ban.
China’s share of global bitcoin mining power declined from 75.5 per cent to 46 per cent over the period, while the existing miners remained static in size and waited for news. During the same period the global mining share of Kazakhstan rose from just 1.4 per cent to 8.2 per cent, catapulting it to third place after the US.
Bitcoin has faced growing criticism for its impact on climate change and a rise in Kazakhstan mining is likely to further that narrative as the country is heavily reliant on fossil fuels. Kazakhstan was the world’s ninth largest producer of coal in 2018, according to International Energy Agency data. In that same year, 70 per cent of its electricity was derived from coal power, and 20 per cent from natural gas. Renewables made up only 1.4 per cent of the country’s energy supply.
