Bitcoin Emissions Rise After China Ban
After China banned bitcoin mining last year, the process has become even more polluting.
Most people are now familiar with Bitcoin. Some see cryptocurrency as a good decentralized currency that might replace our physical money in the future. Others don’t see the currency as a means of payment, but as an investment (hopefully) to get rich. But all these currencies do not come out of nowhere. Mining bitcoins emits more and more carbon dioxide, according to research by scientists from the Free University of Amsterdam, among others. They published their study in Joule.
Bitcoins are not issued by a central body, such as a bank. Instead, they are generated by a network of computers. All computers in that network keep a cash book at all times. It states who owns which bitcoins. Every time someone exchanges bitcoin, for example by selling it or buying a product with it, all these computers update their cashbook. In return, they get the chance to find the next bitcoin. This is purely random. Each computer chooses a number and whoever guesses the correct number “wins”.
According to the survey, in May 2021, about 2.9 million specialized devices were involved in this process. It is estimated that the machines make up to 160 trillion bets per second.
When all of these bets are made, the devices use a great deal of power, knows Dutch data scientist Alex de Vries, who is the study’s lead researcher. In an interview at KIJK 8/2021 he explained why a large part of the miners chose to settle in China. Miners are looking for places where they can get electricity that is cheap and also readily available. Bitcoin miners’ computers work all day and the temporary absence of electricity means less chance of finding the next coin.” This combination of cheap and always available electricity has made China very attractive. This accounts for a whopping 44 percent of the country’s total bitcoin mining activity.
Especially in Xinjiang, many miners can be found. There is a surplus of coal used to generate electricity. De Vries explained in the same KIJK interview that electricity costs are negligible due to this surplus. In the summer, miners shut down all of their equipment to move the operation to more southern counties. At that time there was a surplus of energy from hydroelectric power stations. This was cheaper energy than surplus coal.
But that party is over for miners since last summer. The Chinese government has banned mining for environmental reasons, among other things. So the miners packed up and replaced China with Kazakhstan and the United States, among other places, where cheap electricity can also be found.
But the move also means a significant increase in emissions. Kazakhstan uses “hard” coal, which researchers say has the highest carbon content of all coal. In addition, the country’s power plants are less efficient. The United States depends primarily on gas and coal to generate electricity. This results in significantly more emissions than the hydroelectric power plants that were often used to generate electricity in China.
The average amount of emissions increased due to the transition from an average of 478.25 grams of CO22 per kilowatt-hour in 2020 to 557.76 in August of 2021. Research shows that cryptocurrency creation is now responsible for a total of 65.4 MtCO22 every year. For comparison: the whole of Greece emitted 56.6 MtCO2 in 20192 From.
sources: Jules (via ScienceDirect), The Verge, look 8/2021
picture: Tim Rickman, Wikimedia Commons
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