– For a long while, China had the highest concentration of Bitcoin hashing power.- However, a government crackdown on crypto activity saw that fall drastically.- That fall has had a significant impact on Bitcoin’s carbon footprint.In 2021, China, the then world’s largest Bitcoin (BTC) mining hub, made a bold move.It banned all crypto-mining activities.That decision has profoundly impacted the global BTC mining landscape and its environmental effects.Per a [BanklessTimes.com](https://www.banklesstimes.com/) report, that ban led to a [34% decrease in BTC mining’s carbon footprint.](https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2023EF003871) Prior to the censorship, China accounted for roughly 70% of the world’s BTC hashing power.
But that shrunk to 21% in 2022.
This fall coincided with a 13% cutback in the world’s BTC mining energy supply from coal.That, in turn, caused the reported drop in carbon emissions.Impact of the Ban According to BanklessTimes crypto expert Alice Leetham, China’s decision was a catalyst for more decentralized distribution of mining operations globally.She explained: China’s crypto mining ban saw many miners relocate to countries with favorable renewable energy sources.
And with their migration came a greener approach to cryptocurrency mining.This shift has not only diversified the geographic landscape of mining but also aligned the industry with more sustainable energy practices.BanklessTimes crypto analyst, Alice Leetham To illustrate her point, Leetham gave the example of [Foundry](https://www.foundrydigital.com/mining-service/foundry-usa-pool/), the largest BTC mining pool worldwide.
She insists that the dwindling of China’s Bitcoin hashing power allowed such organizations with an [ESG focus](https://www.bloomberg.com/news/articles/2022-06-24/an-abc-on-esg-and-sustainable-investing-s-flavors-quicktake?utm_medium=cpc_search&utm_campaign=NB_ENG_DSAXX_DSA _EVG_XXXX_XXX_Y0469_EN_EN_X_BLOM_GO_SE_XXX_ &gclid=Cj0KCQiAo7KqBhDhARIsAKhZ4ugsJyolazmpNdcQexn_48DACUcvpliKTNdwagwtizPQOiuBEGVqDF0aAlIVEALw_wcB&gclsrc=aw.ds) to step up their operations.According to the American firm, its members [use up to 71% of green energy](https://foundrydigital.com/) in mining.
Leetham further contends that the ban stimulated innovation in mining hardware and software.Emerging technologies include more energy-efficient ASIC miners and advancements in cooling systems.These developments underline the industry’s dedication to reducing its ecological footprint.Reasons For China’s Crypto Mining Ban China’s crackdown on crypto mining arose from three primary considerations.
For starters, the activity’s massive energy demands, particularly in regions reliant on coal power, raised environmental concerns.BTC has attracted criticism for its massive carbon footprint, and the nation that is already a major emitter sought to cut that.Additionally, Chinese regulators were uneasy about the [risks associated with crypto assets](https://www.bis.org/publ/bisbull66.pdf).These are difficult to regulate due to their decentralized nature.
Beijing feared that unscrupulous individuals would use them for illegal activities such as money laundering, trafficking, and funding terrorism.Besides, their high volatility could destabilize the nation’s economy.China has long adopted a centralized and socially stable economic system.Cryptocurrencies, as stated earlier, are decentralized.As such, the Chinese government views them as a threat to its authority and control over its financial system.While the ban has had its positive impacts, it has come with its challenges, too.One of these is the potential centralization in new mining locations.Leetham fears that the influx of miners into crypto-friendly regions could re-concentrate hashing power there.
As such, the sector must acknowledge and address these concerns for its long-term sustainability..
