This is why people around the world have set up Bitcoin mining “farms”, consisting of stacks of computers and graphics processing units (GPUs) that work day and night to reap Bitcoin while keeping the blockchain running.It’s an activity that infamously sucks up a huge amount of energy—Venezuela reportedly cracked down on Bitcoin mining for siphoning power from the grid, before the government started mining itself, and the city of Plattsburgh, New York put a moratorium on Bitcoin mining in 2018 as a result of the exorbitant power costs. In the Black Sea territory of Abkhazia, networks of digital farms are consuming so much power that they’ve been blamed for rolling blackouts.China accounts for more than 75 percent of the Bitcoin network’s current hashing power.In their study, published Tuesday, the researchers from Chinese, U.K. and U.S. universities mapped the carbon footprint of Bitcoin mining operations in the country by creating a simulated carbon emission model based on current trends. They suggest that the energy consumption from Bitcoin mining will peak in 2024 and will generate around 130 million metric tons of carbon emissions.
“Anyone can technically become a miner. The software is ready to download, all you have to do is contribute raw computing power, which means your main recurring costs are electricity bills. If you solve the next block, the spoils are yours. The more processing power at your disposal, the greater your mining ability.”
Bitcoin Mining Could Use More Energy Than All of Italy by 2024
A technician inspects computers mining Bitcoin in Quebec, Canada. Photo: Lars Hagberg / AFP
Carbon emissions from Bitcoin mining in China could exceed the total emissions of an entire European country within the next three years, new research suggests.A team of researchers from the University of Chinese Academy of Sciences in Beijing, Cornell University in the U.S. and University of Surrey in the U.K. warns that if people continue to mine Bitcoin unchecked, the energy consumption associated with those activities could reach 297 Twh per year by 2024, more than the 290 TwH in electricity consumed by Italy in 2019.
“Without any policy intervention,” the researchers said, “this emission output surpasses the total greenhouse gas emission output of the Czech Republic and Qatar in 2016.”The findings underscore the growing concerns over the environmental costs of Bitcoin, one of dozens of energy-intensive cryptocurrencies.Bitcoin is underpinned by a technology called blockchain, which enables peer-to-peer transfers to take place without the need for a centralised institution, like a bank. Blockchain is essentially a type of database—in this case a ledger—that stores information on every Bitcoin transaction and organizes that information into a series of “blocks” that are “chained” together. This blockchain is distributed across thousands of computers in different locations around the world, all operated by separate individuals or groups of people. The decentralized nature of the blockchain—anyone can track Bitcoin transactions—has won the cryptocurrency fans who reject the concentration of power in the hands of governments and corporates, as well as speculators seeking to profit from the currency’s meteoric rise in value, from about $1 each in 2011 to an all-time high of more than $60,000 earlier this year.A Bitcoin “miner” is someone who monitors and verifies Bitcoin transactions—adding more information blocks to the chain—and is rewarded, in turn, with a payment of Bitcoin. To verify a transaction, miners have to discover a solution to a mathematic puzzle before anyone else. The more computing power you have, the more likely you will solve the puzzle and, therefore, the more reward you get.
As VICE noted back in 2013:
The authors note that “the attractive financial incentive of Bitcoin mining has caused an arms race in dedicated mining hardware”—evolving from the use of basic, general-purpose computers to increasingly powerful and power-hungry computing rigs—and that “the Bitcoin mining activity and the constant-running mining hardware has led to large energy consumption volume.”The researchers further note that, “Without any policy interventions, the carbon emission pattern of the Bitcoin blockchain will become a non-negligible barrier against the sustainability efforts of China. In addressing these concerns, the authors put forward a handful of recommendations to help mitigate the environmental impacts of Bitcoin mining. For one, they suggest that miners with low efficiency be forbidden from entering the Chinese Bitcoin market, and that policy makers “maintain the network stability of Bitcoin blockchain in an efficient manner.” Another option is that Bitcoin miners in China’s coal-based areas—which the authors suggest account for some 40 percent of the country’s total—be persuaded to relocate to China’s hydro-rich areas instead, “in order to take advantage of the relatively lower cost of surplus energy availability in the area due to factors such as rain season.”Finally, they suggest doubling the carbon tax “to enforce more strict punishment for high carbon emission behaviors of Bitcoin blockchain”. They also note, however, that current carbon taxation policies are not effective at curbing emissions from the Bitcoin industry. Overall, the researchers suggest that individual regulation policies for Bitcoin miners could represent the best way to cut down on untrammelled energy consumption and reduce future carbon emissions from blockchain operations. If things keep going the way they are, Bitcoin mining could make it harder for China to meet its Paris Agreement targets of curbing carbon emissions by 2030—and Elon Musk’s favourite crypto could come to represent a blight on the state of the global environment.Follow Gavin on Twitter