China’s bitcoin gold rush is a growing ‘threat’ to curbing climate change, study warns
Bitcoin 'at tipping point of mainstream acceptance' says expert
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Bitcoin is the digital currency of choice for the modern world but with that distinction come certain drawbacks. In particular, the method by which virtual tokens of the cryptocurrency are created is becoming an increasingly power-hungry process. Unlike traditional coins, which are minted from metal alloys, bitcoin and other crypto tokens are “mined” by powerful computer rigs that work around the clock to solve complicated puzzles in exchange for BTC.
In the earliest days of bitcoin mining, the process was fairly simple and the rewards for cracking the puzzles were high.
But the more bitcoins are mined, the harder the puzzles become and more powerful equipment is needed to mine new tokens.
In other words, mining bitcoin has become an incredibly power-hungry process that consumes worrying amounts of electricity – and it is only going to get worse.
In countries like China, where much of the energy is generated through the burning of fossil fuels, supplying the energy needs of the country’s colossal bitcoin mining operations is expected to have an adverse effect on climate change.
China is presently responsible for just under 80 percent of the world’s global cryptocurrency trade.
The country has also committed itself to cutting down on its carbon emissions by 2030, with a goal of becoming carbon neutral by 2060.
But new research published in the journal Nature Communications has proposed the two might not be compatible.
According to the study, China’s bitcoin mines are expected to generate as much as 130.5 million metric tons of carbon emissions by 2024.
To put into perspective, the emissions would surpass the 2016 emissions of the Czech Republic and Qatar.
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The study reads: “The growing energy consumption and associated carbon emission of Bitcoin mining could potentially undermine global sustainable efforts.
About 40 percent of the energy used to power China’s bitcoin mines comes from the burning of coal, while the rest is renewable.
And since coal-based electricity is typically cheaper, regions running on fossil fuels may be more attractive to big bitcoin mining operations.
In light of the report, the study’s authors fear bitcoin mining could undermine China’s climate goals, which are part of a global initiative to curb global warming and climate change.
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Wang Shouyang from the Chinese Academy of Sciences said: “The intensive bitcoin blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort.”
Unfortunately, the researchers fear implementing traditional stopgaps like carbon tax credits would have little effect.
The researchers noted in the study: “Through scenario analysis, we find that some commonly implemented carbon emission policies, such as carbon taxation, are relatively ineffective for the bitcoin industry.
“On the contrary, site regulation policies for Bitcoin miners which induce changes in the energy consumption structure of the mining activities are able to provide effective negative feedbacks for the carbon emission of bitcoin blockchain operation.”
And bitcoin mining is a very lucrative business, with prices per token exceeding £42,000 ($58,100) as of April 6.
Instead, the researchers have proposed China’s government invests in updating its power grids to include more renewable energy.
Dr Wang said: “Since energy prices in clean-energy regions of China are lower than that in coal-powered regions… miners would then have more incentives to move to regions with clean energy.”
According to experts at Cambridge University’s Bitcoin Electricity Consumption Index, cryptocurrency mining will be responsible for about 0.6 of the world’s electricity production – more than the entire country of Norway.
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