Post-regulatory crackdowns, power grid outages, here’s where Bitcoin mining is heading
Erik Thedéen, the Vice-chair of the European Securities and Markets Authority, recently recommended a ban on proof-of-work mining in the EU. Citing its impact on Sweden, he stated,
“It would be an irony if the wind power generated on Sweden’s long coastline would be devoted to Bitcoin mining.”
Previously, Norwegian authorities had also raised similar concerns around crypto-mining using an extensive amount of renewable energy.
While more miners are turning to renewable sources, it is clear that they still fail to address energy concerns in many parts of the world. In 2021 and early 2022, several countries including Russia, Kazakhstan, and Kosovo reported energy-related turmoil. This was at the same time as the power consumption for crypto-mining was on a rise. So much so that Russia is now reportedly mulling a mining ban too.
Last year, a similar policy decision by China to ban Bitcoin mining displaced close to 70% of the miners globally.
Source: Cambridge Bitcoin Electricity Consumption Index (CBECI)
As per CBECI estimates, even Russia’s decision will impact over 11% of the global hashrate.
In this context, Gavin Qu, VP of Operations at crypto-mining firm PrimeBlock, told AMBCrypto,
“As a result of power grid pressure, internet outages, and clampdowns on bitcoin mining, there has been a notable decrease in the network hashrate.”
Source: Blockchain.com
He further explained that Kazakhstan previously controlled an estimated 18% of the total Bitcoin hashrate. Which, as per Qu, is responsible for a drop in January. He said,
“And if we calculate the drop from ~207EH to ~168 EH in early January, this represents a decrease of ~18%, which accounts for the outages in Kazakhstan.”
However, while he expects likely future fluctuations in
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