Environmental impact of Bitcoin mining has gotten worse since China’s ban, according to a new study
Bitcoinindustry groups have often claimed that green mining is gaining prominence.
- However, a new study published in
Jouleshows that Bitcoin’s carbon emissions are rising significantly.
- Bitcoin’s hash rates hit new highs in January this year.
AdvertisementDespite a growth in the use of green energy for mining cryptocurrencies, Bitcoin miners’ environmental woes don’t seem to be going away soon. While miners have quickly relocated to new countries after China’s crackdowns on
According to a peer-reviewed study in the journal Joule last week, mining Bitcoin has become “less green than ever before.” This report contradicts claims that both miners and industry bodies have made over the past year. Environmental concerns were amongst China’s chief reasons for pushing miners out of its borders too.
In June last year, a global forum of Bitcoin miners called
China’s crackdown on crypto & its impact
Before China’s ban, the country accounted for 70 percent of the world’s Bitcoin mining. Since then, the Cambridge Bitcoin Electricity Consumption Index shows that the United States and Kazakhstan have become the biggest hubs for Bitcoin mining around the world. The index also shows that Bitcoin mining consumes an estimated 130 TWh of power per year, which is more than the total amount of electricity consumed by smaller countries like Finland in a year and about a tenth of the electricity consumed by larger countries like India.
Bitcoin’s energy consumption comes from the fact that miners run large data center-like operations, which require very high computing power. This has to be powered through electricity that is generated primarily through fossil fuels. Bitcoin hash rates, which is the measure of the total computing power put towards mining the cryptocurrency, touched new highs in January 2022, according to data from blockchain tracking firm Glassnode.
For countries like China, the US, and more, this could be a problem since it would make it more difficult for climate commitments these countries have made in international forums.
Green energy in the works
That said, countries and miners have been looking for green alternatives too. In a meeting on November 19 last year, the Kazakhstan's President, Kassym-Jomart Tokayev, told bankers in the country that a nuclear power plant could help ease the pressure Bitcoin mining was putting on the country’s power grids. Cambridge’s estimates show that Kazakhstan accounts for about 18% of the world’s total computing power put towards Bitcoin mining.
Proof-of-work cryptocurrencies, which consume considerably less power for mining, have also been gaining traction. For instance, Solana has hit a market capitalization of over $31 billion, which is over 10 times the market cap in March 2021. Solana is a competitor to Bitcoin and Ethereum and uses the proof-of-work model.
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