Contrary to some expectations, Beijing’s crackdown on the crypto mining industry has increased Bitcoin’s carbon emissions, researchers have alleged. According to them, the miners who left China have also abandoned its eco-friendly Hydropower technology and have begun to rely on fossil fuels as a source of energy.
Bitcoin Mining Allegedly Less Green Since Miners’ Exodus From China
Cryptocurrency mining has become a dirtier process after the Chinese government effectively prohibited bitcoin extraction in the People’s Republic, according to research published in the Joule journal. This study shows that the share of renewable energy being used for mining operations fell from nearly 42% down to about 25% in August.
Bitcoin is estimated to produce more than 65 Megatons annually of carbon dioxide. This amount is more than the country’s total carbon dioxide emissions, such as Greece which registered less that 57 megatons in 2019. Alex de Vries was one of the authors.
The network is becoming more green than ever.
Bloomberg interviewed him to explain that mining firms have been moving to more developed countries, such as Kazakhstan and the United States. This has resulted in less renewable energy being used. The environment was negatively impacted by bitcoin production, which resulted to an increase in its carbon intensity of about 17%.
De Vries is the founder of Digiconomist.net, a platform presenting itself as “dedicated to exposing the unintended consequences of digital trends” and publishing the Bitcoin Electricity Consumption Index. De Vries is an economist at Vrije University, Amsterdam and also works for the Dutch central bank. His estimates about Bitcoin’s energy usage have been challenged by crypto media and members of the community but quoted by mainstream publications.
Migration to the U.S. has expanded the use of fossil fuels, especially natural gas, as a relatively small portion of the nation’s electrical energy is sourced from renewables, the latest report co-authored by De Vries claims. And moving to Kazakhstan often leads to utilizing electricity from power stations burning what’s known as “hard coal,” polluting more than the Chinese plants that miners worked with outside the wet season.
China outlawed crypto trading in 2017, but it did not intervene with mining operations until the spring of 2017. In May 2021, the State Council decided to clamp down on the industry following President Xi Jinping’s pledge to achieve carbon neutrality in the next four decades. In Sichuan, where miner had hydropower access, this crackdown was extended.
BBC stated in an article that more industry organizations were optimistic about the potential use of renewable energy for the production of digital currencies. It quotes an older estimate made by the Bitcoin Mining Council, according to which the “global mining industry’s sustainable electricity mix had grown to approximately 58.5%.”
In Europe, regulators such as the European Securities and Markets Authority and Sweden have expressed concern about the increasing use of bitcoin mining energy. The EU should ban energy-intensive mining practices, as they have made calls to this effect.
On Friday, news came out that the European Parliament canceled a scheduled vote on the bloc’s new crypto regulations after a proposal to prohibit proof-of-work mining found its way to the draft Markets in Crypto Assets (MiCA) framework and sparked negative reactions from the industry.
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