The power demands and carbon emissions of bitcoin mining could undermine global efforts to combat climate change if stringent regulations are not placed upon the industry, a Chinese study has found.
Using simulation-based models, the researchers found that, short of any policy interventions, bitcoin mining in China will peak in 2024 consuming 296.59 terawatt hours of electricity—as much as a medium sized country—and generate 130.50 million metric tons of carbon emissions.
But the solution to the challenge, the authors argue, is “moving away from the current punitive carbon tax policy to a site regulation policy”—in essence, ensuring that mining operations move to areas that guarantee high rates of renewable electricity.
“Site regulation should be carried out by the government, placing limitations on bitcoin mining in certain regions that use coal-based heavy energy,” Wang explained.
With the value of a single bitcoin having risen from $1 in April 2011 to around $60,000 in April 2021, and with yesterday’s news that the value of the cryptocurrency market has exceeded $2 trillion for the first time, the financial incentives to mine bitcoin are obvious.
This has helped ignite fierce competition, attracting an increasing number of bitcoin miners to get into the race, utilizing ever more powerful processing arrays requiring more electricity.
“We have predicted through our model that bitcoin mining operations in China would start to decrease in 2025,” Wang said.
Now, using more advanced modeling techniques, Chinese researchers have been able to more accurately estimate the energy uses of specific industry operations.
“However, we don’t think that this increase in bitcoin mining operations would place burdens on the local energy grid.
“We think that simply banning bitcoin mining altogether is not ideal,” Wang said.
“Cryptocurrency communities have become increasingly aware of the carbon emissions generated through mining activities,” he said.