China’s share of global bitcoin production capacity has fallen sharply even before a recent crackdown on cryptocurrency mining by Chinese authorities, according to research from the University of Cambridge on Thursday (July 15).
China has long been a global hub for cryptocurrency mining, an energy-intensive process. Many of China’s bitcoin miners use fossil fuels, including coal, which has raised concerns about bitcoin’s environmental footprint.
The country’s share of the power of computers connected to the global bitcoin network, known as the “hash rate,” fell from 75.5 percent in September 2019 to 46 percent in April this year, according to the Cambridge Centre for Alternative Finance.
Over the same period, the U.S. hash rate share jumped from just over 4% to 16.8%, making it the second largest bitcoin producer. Kazakhstan’s share also rose to around 8%, with Russia and Iran being the other major producers.
The study provides a rare insight into global trends in bitcoin mining amid growing concerns from companies like Tesla about how the cryptocurrency is being produced.
The decline in Chinese mining capacity comes after the country’s State Council cracked down on bitcoin mining and trading in late May, citing potential financial risks.
Anhui province in eastern China became the latest province to announce a complete ban on cryptocurrency mining this week.
Major Chinese mining hubs, including Sichuan, Inner Mongolia and Xinjiang, have issued detailed measures to eradicate the business, as miners abandon their machines or relocate to places like Texas and Kazakhstan.
Bitmain, China’s largest maker of cryptocurrency mining machines, halted sales last month after a mining ban in Beijing and said it was looking for overseas power sources in places like the United States, Russia and Kazakhstan.