Bitcoin’s Carbon Footprint To Get Dirtier Despite China Ban

As per an estimate by Digiconomist, Bitcoin could use enough energy annually, required to power the entire country of Poland. Till 2020, most of the power came from coal and hydropower in China. Recently, the country announced that all cryptocurrency transactions and mining operations will be considered illegal.

 

Will Miners Ever Opt For Clean Energy?

The proportion of miners left in the country is negligible, which could have big implications on the environmental footprint of the cryptocurrency, as emissions follow the coming and going of China's dry and wet seasons.

Miners leveraged the excess hydropower in the country's Sichuan province during the wet season every year, making use of cost-effective, carbon-free energy.

The miners moved north of Xinjiang province when the Sichuan province areas dried up. Coal was the primary source of energy for mining in the Xinjiang province, which emits more CO2 compared to gas and oil.

Since both of these sources to mine Bitcoins have almost been eliminated, it's unclear what it means for the carbon emissions of Bitcoin in the coming days. It's a matter of choice of crypto miners whether they find another source of clean energy like hydropower, or take advantage of natural gas, or make use of coal.

Bitcoin Mining Witnessing Higher Scrutiny

But it's highly likely that Bitcoin's footprint is getting dirtier, notes economist Alex de Vries, who published his research on the cryptocurrency's pollution. As of now, the US seems to be the biggest playground for crypto miners.

As Bitcoin miners moved to the US, they took advantage of coal and natural gas. The mining operations also revived a natural gas plant in New York that previously stopped generating power for the public.

Similarly, a Pennsylvania-based holding firm called Stronghold Digital Mining has bought a whole coal power plant in Venango County to power around 1,800 mining machines.

The plant is burning close to 600,000 tons of coal every year, a troubling return to a polluting form of energy and raises environmental concerns. As several countries aim to cut their carbon emissions, Bitcoin's energy-hungry nature has been under the radar of several governing bodies.

Currently, China is the largest greenhouse gas polluter in the world, but the country aims to bring emissions down to zero by the year 2060. That's a big reason behind its crackdown on crypto mining operations, although the move will open doors for the country's own digital currency.

Is There A Permanent Solution?

Even if crypto mining operations move towards more renewable energy sources to align with rules set by climate-conscious governments, they'll still witness stiff competition from other sectors. Besides, hydropower isn't limitless, and recent droughts in China could restrict the supply of its current hydroelectric supply.

This competition could result in even more pollution, even in areas with clean energy sources. When utilities exhaust all the available hydropower, they often use up dirty natural gas to meet demand.

Speaking of a solution, Bitcoin counterpart Ethereum seems to have cracked the code. The cryptocurrency aims to eliminate complex mathematics puzzles out of the process to bring new coins into circulation. This could bring down a huge chunk of its emissions significantly. But as long as Bitcoin continues to rule the digital currency arena, it's hard to see it moving away from its current polluting model.