unused energy directed to the electric car sector

The unintended consequences of China’s mining purge

Begun last April, the purge of Bitcoin mining (BTC) in China remains one of the most sensitive news of the moment for cryptocurrencies. In total, several provinces have been notified of the obligation to stop their activity by the Chinese government, including Yunnan and Sichuan. As an immediate consequence, at least 10% of Bitcoin’s global hashrate was lost as a result of these forced shutdowns.

The purge caused by the Chinese government had a rather unexpected consequence: that of seeing hydroelectric plants shut down while they were being used by mining farms.

These shutdown power plants represent a real waste, both environmental and economic. Indeed, China’s goal of carbon neutrality in 2060 relies on hydroelectric power stations to produce green, carbon-free and ultimately less expensive electricity.

👉 On the same subject – Mining in China: hydroelectric power plants put up for sale for lack of demand

China: allocating unused energy to the electric car

Among the provinces that have banned mining activity, that of Guizhou is not necessarily the best known. Yet it is to date the first to attempt to remedy the problems of unused hydroelectric plants. Guizhou has in fact planned to build at least 4,500 charging stations for electric cars in 2021, 5,000 in 2022 and 5,500 in 2023.

In 2023, the ambitious goal is to provide the population of Guizhou with 38,000 charging stations, or one per 1,000 inhabitants. By way of comparison, there is a little less than one charging station per 2,000 inhabitants in France.

According to the latest estimates, shutting down much of China’s BTC mining activity has released more than 50 TwH of electricity. To get a feel for what that means, 50 TwH can power a city of one million people for 33 years or meet the charging needs of 10 million Tesla Model 3s per year.

👉 To read – Around 90% of Chinese Bitcoin (BTC) miners are said to be at a standstill

BTC mining remains under fire outside of China

On the miners’ side, because of the important history of Chinese mining, news from China is the most scrutinized. Yet the Beijing government is not alone in taking action against Bitcoin mining. Indeed, last May, the government of Iran also temporarily banned this activity to avoid possible power cuts during the summer.

In Kyrgyzstan, a country from which little information is filtered on the subject of cryptocurrencies, BTC mining is believed to be one of the main culprits in the country’s energy crisis according to a former senior local government official. Due to these limitations, Bitcoin miners were forced to export to other countries, including the United States.

👉 Find all the news about cryptocurrency mining

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About the author: Benjamin Allouch


Lawyer specializing in digital law and personal data. He quickly became interested in bitcoin and blockchain technology, and founded the blog bitcoin-blockchain.fr. He is interested in the emergence of blockchain law and the legal consequences of this technology.
All articles by Benjamin Allouch.

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