Bitcoin mining is estimated to consume 348 terawatt-hours of electricity annually. As the world increasingly shifts towards renewable energy, many are asking: where does Bitcoin actually get its power from?
To answer this, we've visualized data from the Cambridge Centre for Alternative Finance and climate-focused energy think tank Ember to examine the electricity structure of the Bitcoin network.
This marks the first part of our "How Green is Bitcoin?" series, which explores the sustainability of cryptocurrency.
Global Distribution of Bitcoin Mining Power
The top 10 countries by hash rate—a measure of computational power—account for 93.8% of the entire Bitcoin network's mining capacity. The United States, China, and Kazakhstan lead the pack, collectively hosting nearly three-quarters of the global network's hash rate as of late 2021.
China once dominated Bitcoin mining with 75% of global capacity, but regulatory crackdowns during the summer of 2021 caused its share to plummet to nearly zero within months. Many miners relocated to nearby Kazakhstan, attracted by cheap electricity, favorable regulations, and a stable political environment, while others chose the United States. After the dust settled, large-scale covert mining operations also reemerged within China.
At the bottom of the top 10 list are Ireland, Singapore, and Thailand, which together account for 4.9% of the network's hash rate. The reported share for Ireland—and similarly for Germany, which ranks sixth—is believed to be significantly overstated, as miners from other countries often mask their true locations.
The Role of Renewable Energy
Nationally, the renewable energy shares for the U.S., China, and Kazakhstan stand at 22.5%, 30.2%, and 11.3%, respectively. For context, renewable sources accounted for 30% of global electricity generation in 2022 (excluding nuclear power).
Kazakhstan's low renewable energy share is due to its heavy reliance on coal (60%), which is also a major export commodity for the Central Asian nation. Meanwhile, coal plays a similarly significant role in China's energy mix (61%), though the country's overall renewable share is higher thanks to rapid expansion of wind and solar power.
Factors Influencing Mining Location
Bitcoin miners are unique in their mobility compared to traditional industries with fixed factories or headquarters. Their选址 decisions are based on several factors:
- Regulatory environment
- Electricity prices
- Average outdoor temperatures (since mining equipment generates substantial heat)
Regarding temperature, here's how the top 10 mining countries compare by annual average temperature:
- Malaysia - 27.5°C
- Thailand - 27.0°C
- Singapore - 26.8°C
- Brazil - 24.9°C
- China - 11.7°C
- United States - 8.5°C
- Russia - -3.8°C
- Kazakhstan - 5.5°C
- Canada - -5.4°C
- Germany - 8.9°C
As climate change accelerates the transition to renewables, many Bitcoin miners are paying closer attention to their energy sources. This may explain why Canada—with its abundant hydroelectric resources—saw its ranking rise from less than 1% in 2019 to 6.5% by the end of 2021.
Despite this progress, countries with exceptional renewable energy resources—such as Iceland, Paraguay, and Norway—collectively account for just over 1% of the global network, indicating significant room for growth in sustainable mining practices.
👉 Explore renewable mining strategies
Frequently Asked Questions
What is Bitcoin hash rate?
Bitcoin hash rate measures the computational power dedicated to mining and processing transactions on the Bitcoin network. A higher hash rate indicates greater security and more competition among miners.
Why did China ban Bitcoin mining?
China banned Bitcoin mining primarily due to concerns about financial risk, energy consumption, and environmental impact. The government sought to reduce financial speculation and ensure stability in its energy grid.
Which country has the cheapest electricity for Bitcoin mining?
Countries with abundant energy resources typically offer the cheapest electricity for mining. These include Kazakhstan, Russia, Canada, and certain regions of the United States with hydroelectric or natural gas power.
How does renewable energy affect Bitcoin mining?
Renewable energy can make Bitcoin mining more sustainable and potentially cheaper in the long term. Many miners are increasingly seeking locations with abundant solar, wind, or hydroelectric power to reduce their environmental impact and operational costs.
Can Bitcoin mining be completely green?
While Bitcoin mining can incorporate significant renewable energy, complete sustainability depends on local energy mixes and grid infrastructure. Some mining operations achieve carbon neutrality by using excess renewable energy or partnering with green energy providers.
What is the future of Bitcoin mining locations?
The future will likely see miners continuing to seek locations with cheap, reliable energy—particularly renewables—favorable regulations, and cool climates. This may lead to further diversification of mining locations across the globe.