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August 9, 2022
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China has problems due to bitcoin mining

There are many mining farms in China that extract bitcoins and cryptocurrencies. These farms consume a lot of electricity, and this is causing the country a sustainability problem.

In fact, according to a study published in Nature, the CO2 emissions generated by the growing energy consumption of bitcoin mining could threaten its climate change goals.

The study reveals that, unless political measures are taken, the annual energy consumption of bitcoin mining in China is expected to peak in 2024 at 296.59 Twh, generating 130.50 million tons of carbon emissions.

The key point, as the same study points out, is precisely the political interventions that could reduce emissions, since the operation of Bitcoin does not necessarily require that much energy.

In that sense, however, the attitude of Chinese policy towards bitcoin mining is unclear.

Bitcoin mining in China

As reported by Sky News, there are different policies in different parts of China.

The country consists of twenty-two provinces, five autonomous regions, four municipalities and two special autonomous administrative regions. Given the absence of a national policy in this regard, each region acts in fact autonomous.

In Inner Mongolia, for example, some farms have already been closed on their own initiative, while in other places where hydroelectricity is abundant, such as Sichuan, mining farms are being welcomed and favorable policies have been adopted.

The fact is that bitcoin mining can now be a very profitable business, if done with cheap electricity, and local governments are interested in collecting taxes on those profits.

On the other hand, local governments themselves have their own carbon emission targets to meet, so much so that in this scenario there are those who compare the Chinese mining sector to an Old West.

According to research by the University of Cambridge, 65% of the total Bitcoin hashrate is now located in China, making it the country most affected by this problem.

However, this is fundamentally just a political issue, because even if they banned mining, or required only zero-emission sources, or imposed very high taxes on mining, the Bitcoin network would still function without problems. Energy consumption is not due to the Bitcoin protocol configurations, but rather to the free choice of miners: it would be enough to convince them or force them to consume less, and the problem would be solved.

Source: cryptonomist

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