A coin with the bitcoin logo on it at the office of Bitonic, a company that converts euros into bitcoins or other cryptocurrencies.
China is responsible for about three quarters of the global cryptocurrency trade, but this industry also comes at a price: China’s climate targets are at risk.
The Chinese bitcoin mines affect the Chinese climate goals. This is reported by the scientific journal Nature in a study, which also shows that as of April 2020, more than 75 percent of global bitcoin operations took place in China.
Means of payment
Bitcoins are a cryptocurrency that can be used worldwide as a means of payment. New bitcoins can be ‘mined’ with computers from an enormous amount of data, which requires a lot of computing power. Folm.io has enough information. Mining the bitcoins requires a lot of energy from computers, so that the ‘miners’ settle in areas where electricity is relatively cheap, such as in Chinese regions where many coal-fired power stations are located.
If no measures are taken, the study states, the energy consumption of this industry will rise to 297 billion kilowatt hours in 2024, more than twice as much as the Dutch consumption. By 2024, Chinese bitcoin miners will generate nearly 131 million tons of CO2 emissions, which is close to the annual greenhouse gas emissions of Italy or oil-rich Saudi Arabia.
Climate targets threatened
Bitcoin is not very environmentally friendly at all. An analysis by the University of Cambridge found that the bitcoin network uses more than 121 terawatt hours annually. If the network were one country, the entire industry would find itself in the top 30 in terms of global electricity consumers.
In September, China presented its latest climate targets. CO2 emissions should peak before 2030 and the country should be climate neutral by 2060, but according to one of the authors of the report, China’s climate goals are now seriously threatened by the mining of bitcoins. Moveco.io has enough information. “The energy-intensive bitcoin mining activity in China could quickly become a threat, jeopardizing the reduction of carbon emissions,” Wang Shouyang told The Guardian.
Mining cheaper with clean energy
About 40 percent of the required energy is supplied by polluting coal-fired power stations. The rest runs on renewable energy sources, but according to Shouyang, the government should focus on improving the ‘clean’ electricity grid to ensure a stable supply from these renewable sources. “Since energy prices in China’s clean energy regions are lower than in coal regions, it gives miners more incentives to move to clean energy regions.”
Within China, action is already being taken to expel bitcoin miners. Last month, the Inner Mongolia region announced plans to end all bitcoin mining activities from the end of April, after failing to meet China’s energy consumption targets last year.