Chinese Bitcoin Miners Are Still With Many, And They Turned Green

Daniel Batten, Managing Partner at CH4 Capital and a respected voice on the environmental sustainability of Bitcoin, in his latest research “The surprising story of Chinese Bitcoin mining“, provides an eye-opening and perhaps surprising look into Bitcoin mining in China. It is not what many of us thought it would be. There is still plenty of mining going on in the country.

Quiet Continuation of Mining

First, Batten highlights the resilience of the Chinese Bitcoin mining sector despite the so-called ban. Contrary to expectations, not only did the mining hashrate find its way back to China, but it also adopted more sustainable practices. The current hashrate in China makes up about 15% of the global total, a slight decrease from 21.1% before the ban but still a significant figure. This suggests a quiet continuation of mining activities, despite official statements to the contrary. “China outwardly says ‘Bitcoin mining is banned’ but it’s not,” Batten notes, drawing a stark contrast with Kazakhstan’s stance on mining.

Greener Mining

One of the most significant changes in Chinese Bitcoin mining post-ban is the elimination of coal-based off-grid mining. This move aligns with the Central Government’s emission targets and has led to a reduction in the sector’s carbon footprint. Nowadays, mining primarily relies on hydro and micro-hydro sources, especially during the wet season, making the most of the cheap and abundant hydroelectric power available.

China outwardly says ‘Bitcoin mining is banned’ but it’s not

Converting Yuan to USD

Batten’s research also uncovers a surprising trend in retail on-grid mining, where individuals willingly mine at a loss. The motivation behind this is to convert Chinese Yuan into USD, circumventing financial restrictions. “Many retail miners are happy to take the profitability hit simply to have a way to convert Yuan to USD,” Batten explains.

Free Recycled Heat

Another interesting finding coming from Batten’s research is the cooperation between mining operations and local provincial governments, which often support mining activities for economic benefits. He shares the story of a 13 MW mining operation that collaborates with the Provincial Government. This partnership not only allows the mining operation to continue but also provides the government with free recycled heat. “Because 95% of the energy from Bitcoin mining is disbursed through heat, this is almost as effective as getting heating for free,” Batten points out. This recycled heat is then used for practical purposes, such as heating water for fish farms.

We’re grateful for Daniel Batten’s diligent research, which continually sheds light on the nuanced aspects of Bitcoin’s environmental impact. His work is a beacon of clarity in an often-misunderstood area, emphasizing the cryptocurrency’s potential for ‘green’ innovation. In a landscape where Bitcoin faces intense scrutiny, just as recent as two weeks ago when GreenpeaceUSA targeted the cryptocurrency, Batten’s insights are invaluable for presenting a balanced, honest perspective.We look forward to Batten’s new reports, confident in the knowledge and understanding they bring to the complex dialogue surrounding the world’s leading cryptocurrency.