Global Bitcoin miners are estimated to use 348 terawatt hours of electricity per year to power their mining rigs. As the world increasingly shifts towards renewable energy sources, it begs the question: How are Bitcoin miners incorporating renewable energy into their sector?
To answer this question, Visual Capitalist, one of the world’s largest publishers of visual data focused on global trends, investing, technology, and the economy, has partnered with Hive Digital to visualize data from the Cambridge Centre for Alternative Finance and Ember – a climate-change think tank – to show the green energy mix in Bitcoin mining.
As per the report, the top 10 countries for Bitcoin mining represent nearly 94% of the entire network’s hashrate – a measure of computational power required to run the Bitcoin blockchain. The United States, Kazakhstan, and Canada make for the top three, together hosting nearly three-quarters of the network at the end of 2021.
The top countries for Bitcoin mining are:
China used to be the hotspot for Bitcoin mining up until 2021 when Beijing issued a ban on all cryptocurrencies and crypto asset-related activities, including mining. At its peak, the country accounted for 75% of the global Bitcoin mining activity.
However, just a few months after the ban, China saw its share drop to near-zero, with many miners relocating to nearby Kazakhstan. Miners were attracted to the country mainly because of the cheaply available electricity, loose regulations, and a stable political climate. Meanwhile, others moved their operations to the US and other countries around the world that were ready to welcome the niche sector.
The Role of Renewables in Energy Production Among Leading Bitcoin Mining Nations
The top countries on the list – the US, Kazakhstan, Canada, and Russia – generate 22.5%, 30.2%, 11.3%, 69.7%, and 18.5% of their electricity from renewable sources such as wind, solar, and water. Countries at the bottom of the list – Germany, Malaysia, Ireland, Singapore, and Thailand – power 43%, 19.1%, 38.6%, 2.4%, and 15.5% of their grid with renewable energy.
Renewables, excluding nuclear, made up 30% of the global electricity production in 2022.
Top 10 Countries for Bitcoin Mining
1. United States
The United States accounts for 35% of the global hashrate. In 2021, the US took the lead from China after Beijing banned Bitcoin mining. In August of that year, the US increased its monthly hashrate to 42.74 Exahashes per second (EH/s).
2. Kazakhstan
Three years ago, Kazakhstan was ranked fourth on the list of top Bitcoin mining countries, with a monthly hashrate of 9.2 EH/second. As of today, Kazakhstan outputs 18.1% of the total Bitcoin mining rates, with a monthly mining speed of 21.85 EH/s.
In 2022, political unrest in the country also affected mining operations. The government was forced to block internet access and disrupt communications due to protests that were sparked by increased fuel prices.
3. Russia
Russia accounts for 11.2% of the global Bitcoin mining rates. Since January 2021, the country’s mining speed has increased from 10.3 EH/s to 13.56 EH/s.
However, there is a mighty chance that Russia could lose its position after its central bank ordered the federal government to ban the use and mining of cryptocurrencies due to their impact on financial stability, the welfare of its citizens, and the sovereignty of its monetary policy.
4. Canada
Canada along with the US are the two countries in the Americas that benefited the most from China’s crackdown on Bitcoin mining and cryptocurrencies. In 2023, the country advanced six places to rank third on the list with a share of 6.5% of the global Bitcoin hashrate. Canada’s monthly absolute hashrate stands at 11.5 exahashes per second.
5. Germany
Germany is considered one of the most crypto-friendly countries in the European Union. It comes as no surprise that it is among the nations that mine the most Bitcoins in the world.
Germany is responsible for 3.1% of the global Bitcoin hashrate and has a monthly mining speed of 3.06 EH/s.
6. Malaysia
Malaysia is also a significant contributor to Bitcoin’s hashrate, accounting for 2.5% of the global output. The monthly mining speed achieved by the country is 2.5 EH/s.
However, the country is stringent when it comes to implementing laws. In 2021, Malaysian police destroyed over 1,000 Bitcoin mining rigs after they were found to have stolen more than $2 million worth of electricity from the national grid.
7. Ireland
Ireland accounts for 2% of the global Bitcoin mining hashrate, with a monthly output of 5.6 EH/s. However, miners in Ireland suffer from reduced margins whenever the price of Bitcoin falls due to the extremely high cost of running the blockchain in the country.
It is assumed that global Bitcoin mining operations consume more electricity in a year than the entire country of Ireland.
8. Singapore
Singapore accounts for 2% of the global Bitcoin hashrate. Despite being strict in terms of regulations, the country is more open to crypto service providers operating in the country. However, Singapore is not free-for-all, especially for Bitcoin miners.
9. Thailand
The monthly speed of Bitcoin mining in Thailand is 0.96 EH/s and the country contributes 1% of the global hashrate. Despite the country being a crypto hotspot, regulatory actions by the government against miners have been tough. In late 2022, thousands of mining rigs were seized and destroyed by authorities.
10. Rest of the world
There are 48 other countries where Bitcoin mining operations take place. These nations all put together contribute just 6.3% of the global hashrate. Many of these countries have a blanket ban on cryptocurrencies but have allocated a small portion of their power grid for crypto mining operations.
These include oil-rich countries like Saudi Arabia, the United Arab Emirates, and Oman, which are trying to diversify their economy and become less dependent on fossil fuels.
Does Location Play a Role in Mining Efficiency?
Just where a Bitcoin miner sets up their rig is as important as the operation itself. Because, unlike other industries that have large factories and big offices, mining rigs are mobile and are furnished inside shipping containers for easy transportation.
Where miners choose to place their rigs is dependent on several factors such as regulatory regime, electricity costs, and outdoor temperature.
With climate change pushing global policies regarding energy production, more countries are demanding that industries power a portion of their activities using renewable sources. Due to this reason, miners are also closely looking at the source of their electricity.
This could also be why countries like Canada, Iceland, Paraguay, Sweden, and Norway, which power a vast majority of their grid using renewable energy and have cooler climates, are looking more attractive to Bitcoin miners.
For your reference, the mean annual temperature in Celsius among the top Bitcoin mining countries is as follows:
Related Articles: Bitcoin Halving Countdown – What Is It And When Is Gonna Happen?
