According to a recent study, despite China Ban Bitcoin last year, mining the largest cryptocurrency has become significantly dirtier, emitting about the same amount of CO2 yearly as a country the size of Greece.
Bitcoin Has Become Less Green China Ban Bitcoin
Mining is the process of creating new bitcoins with the help of large clusters of powerful computers.
Miners stopped utilizing Chinese hydro and migrated to the United States, where gas supplies the majority of their electricity, and the amount of renewable energy powering mining decreased from 41.6 percent in 2020 to 25.1 percent last August.
Bitcoin, according to researchers, now emits carbon emissions similar to Greece.
Industry groups had been more optimistic about the use of renewables. Previously, the Bitcoin Mining Council estimated that the “global mining industry’s sustainable electricity mix had grown to approximately 58.5%”.
In order to maximize their profitability, bitcoin miners will often try to relocate to areas with plentiful inexpensive electricity. Large quantities of electricity are consumed by specialized computers that verify crypto transactions. In the past, bitcoin miners in China would migrate during the rainy season from provinces with cheap fossil-fuel electricity to those with plenty of hydropower.
However, by June 2021, mining had all but disappeared in China, thanks to prohibitions in major provinces. After being forced out of China, mining shifted to the United States and Kazakhstan. According to researchers, this is one of the reasons why Bitcoin has grown less ecologically friendly.
Carbon Flight
The use of fossil fuels, notably natural gas, grew after the shift to the United States.
“Renewable energy sources make up a minor part of the US grid,” Mr. De Vries explained. He went on to say that numerous crypto-mining-friendly states, such as Texas, Kentucky, and Georgia, underperformed the national average in terms of renewable energy generation.
According to the researchers, Kentucky, for example, “offers tax benefits to attract Bitcoin miners, thereby saving coal firms.”
Kazakhstan also has coal-fired power plants that use “hard coal,” which is more polluting than its Chinese equivalents, according to the researchers. According to the study, the carbon intensity of Bitcoin increased by around 20% as a result of these changes.
Going Green
Mr. De Vries and his co-authors say their research highlights the need for the crypto industry to accelerate efforts to decarbonize. The Crypto Climate Accord is one such initiative.
Its members pledge to achieve net-zero emissions from electricity consumption related to their crypto operations by 2030. But the report suggests that is a long way off.
“A rapid solution to Bitcoin’s carbon footprint is not within sight,” the authors conclude. Mr. De Vries says it shows the need for international co-operation. “China decided to ban cryptocurrency mining, but we see that that actually had an adverse effect”, he said.
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