China’s Greed for Bitcoin Seems to Undermine Its Climate Goals

There’s no doubt that bitcoin has brought out greed in many of our minds. After all, greed is just an element of humanity – although most of us don’t want to admit that.

china greed for bitcoin

Sometimes we try to cover up our greediness by making excuses for our actions. And we find ourselves doing things that fly in the face of our principles and beliefs that guide us.

China’s greed taking hold

Apparently, this is what is happening to China in regards to its bitcoin mining operations.

China’s bitcoin mines have become so energy-hungry that almost 80% percent of its global trade in cryptocurrencies threaten national climate goals. This is according to studies conducted by the popular journal Nature Communications.

Not enough clean energy

Bitcoin, as well as other cryptocurrencies, are actually mined by solving complex puzzles with powerful computers. These operations require a massive quantity of electricity, and in the case of China, much of this energy is produced by its coal plants.

The Nature Communications report concluded that left unchecked, the bitcoin mines of China will create over 130 million metric tons of carbon emissions by the year 2024. This is around the same amount of greenhouse gas emissions from the nation of Italy or oil-rich Saudi Arabia for an entire year.

Blockchain carbon emissions

Chinese companies using cheap electricity and hardware have accounted for around 80% of all of its global bitcoin blockchain operations up to April 2020, the study reported.

This includes both the minting of new coins and maintaining cryptocurrency transactions.

Around 40% of Chinese bitcoin mines are energized by coal operations, while the remainders use renewables. But these coal-hungry operations are so vast that they are jeopardizing Beijing’s pledge to peak their carbon emissions prior to 2030 and reach a carbon-neutral state by 2060.

“The intensive bitcoin blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort,” stated co-author Wang Shouyang from the Chinese Academy of Sciences.

The government ought to focus on upgrading its energy grid to assure a stable supply of power from renewable sources, Shoutyang concluded.

“Since energy prices in clean-energy regions of China are lower than that in coal-powered regions… miners would then have more incentives to move to regions with clean energy.”

Recent estimations indicate that year; the crypto-mining will use around 0.6% of the world’s energy production. In simpler terms, this would equivalent to the annual usage of Norway.

Bitcoin surges increase demand for mining

Over the last year, bitcoin values have surged fivefold as they reached a record high of over $61,000 in the month of March. Presently, it maintains steady just under the $60,000 mark.

Because of the enormous profit potential, it is believed that a carbon tax would not deter bitcoin miners. They think it would be well worth the risks.

The Chinese actually stopped the trading of cryptocurrencies in 2019 to prevent the laundering of money, but crypto-mining is still allowed.

Regions in China that depend on coal production are now removing bitcoin miners to curb their carbon emissions.

Inner Mongolia stops bitcoin mining

Recently, Inner Mongolia publicly announced its plans to suspend cryptocurrency mining by the end of April. This was their response when the region could not meet annual energy usage targets.

This region represented around 8% of all computing power required to operate the global blockchain. This alone is more than the total amount of computing power used for blockchain in the United States.

Bitmain, which is one of the world’s large cryptocurrency mining pools, and is listed on Nasdaq, recently announced that they were moving from Inner Mongolia to regions like Yunnan, where more hydropower is being used.