Carbon Emission Risen Since China’s Crypto Mining Ban – Study
China’s exit from the cryptocurrency mining space may not have abated the carbon footprint left behind by the industry, a new study has suggested. Rather, it has increased the emission since China – which used to have the largest concentration of crypto miners – banned related activities last year. According to the authors of the new peer-reviewed study published in the energy research journal Joule, mining top cryptocurrencies like Bitcoin has made the CO2 emitted into the environment even worse with the impact since the ban last year.
With the US and Kazakhstan now the two biggest Bitcoin mining hubs, the joint study titled Revisiting Bitcoin’s Carbon Footprint finds that the latter’s reliance on hard coal and the former using mostly gas followed by coal for its electricity, have given rise to emission – about 65 megatons of carbon dioxide a year.
“It’s bad news for Bitcoin owners because their holdings just got more dirty,” one of the authors Alex de Vries told the New York Times. “There was a lot of optimism that China banning Bitcoin mining would make mining more green. But the fact is, it was already a dirty business, and it just got worse.”
De Vries, who is a researcher at the School of Business and Economics at the Vrije Universiteit in Amsterdam, adds that Kazakhstan’s coal, the most carbon-intensive type of coal, replaced the Chinese coal, while miners in the US replaced hydro power with natural gas.
In 2020, China set a target to peak carbon dioxide emissions by 2030 and to achieve carbon neutrality by 2060. Crypto mining reportedly threatened this plan hence China’s decision to put a stop to related activities within its borders in May 2021 as a form of policy intervention to prevent the country from reaching an annual energy consumption of mining at 296.59 Twh by 2024 and generating 130.50 million metric tons of carbon emission correspondingly.
Following the ban by China, Bitcoin’s computing power (hash rate) dropped to result in what has been described as the great distribution – what used to be approximately 75% of the Bitcoin network’s hash rate coming from dropped to almost 0%. On the other hand, the 4% contribution from the U.S., rose to about 35%.
While the study shows that the share of natural gas used for Bitcoin mining doubled from 15% to 30% after miners left China, it also finds that the share of renewable electricity sources for the cryptocurrency somewhat dropped from an average of 41.6% in 2020 to 25.1% in August 2021. This is because the Bitcoin network no longer has access to hydro power from the Chinese provinces of Sichuan and Yunnan, it shows.
“The reason why they had that amount of renewables was because within China, they could move around and they could get hydro power during the summer months and then in the winter months, they would be using coal,” de Vries told Euronews. He adds that the price of renewables has to reduce for miners to use them as their main preferred source of power. For the network to go more green, there needs to be a kind of enforcement mechanism in place for miners to switch to renewable power sources and mitigate the environmental damage caused by cryptocurrencies.