China’s bitcoin blockchain threatens climate goals

(Bloomberg) – Energy consumption and carbon emission from bitcoin mining will undermine China’s climate efforts if it does not establish stricter regulations and policy changes, according to a study published in Nature Communications this week.

The energy consumption of bitcoin mining in China – a country that accounted for more than 75% of bitcoin blockchain operations globally as of April 2020 – is projected to peak in 2024 of about 297 terawatts. hour, generating 130 million metric tons of carbon emissions, according to the study by researchers from the University of the Chinese Academy of Sciences, Cornell University, Tsinghua University and the University of Surrey.

China’s energy consumption from bitcoin mining in 2024 will exceed the total energy consumption level of countries such as Italy and Saudi Arabia, according to the study, and carbon emissions will exceed greenhouse gas emissions from countries such as countries. Netherlands, Spain and Czech Republic.

Bitcoin transactions are processed by miners, cryptographic slang for companies that operate a wide range of computers. Miners compete to confirm transactions and get new coins in return, but they require large amounts of energy to function.

Cryptocurrencies have received more attention in recent months. Bitcoin’s valuation increased eightfold in the past year and the entire crypto complex recently surpassed $ 2 trillion in market capitalization. That increases the incentives for mining and using bitcoin, although the algorithm demands massive computational power to validate transactions and the mining hardware creates considerable carbon emissions.

Since energy is cheaper in China, is subject to fewer taxes and is supplied by abundant coal and hydroelectric plants, it has become one of the most sought after destinations for bitcoin mining. The researchers showed that individual regulation policies could be more effective in curbing emissions in industry. These could induce changes in the energy consumption structure of mining activities, compared to the punitive carbon tax policy that is more popular today.

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As part of the Paris Agreement commitment to fight global warming, Chinese President Xi Jinping promised that China will reach peak carbon by 2030 and achieve carbon neutrality by 2060. Since then, various sectors in China have announced They will develop roadmaps to achieve carbon neutrality.

However, the Bitcoin blockchain operation is not listed as a separate department for carbon emissions in China, which “makes it more difficult for policymakers to monitor the actual behavior of Bitcoin and design well-targeted policies,” according to the researchers. .

“Without appropriate interventions and viable policies, the bitcoin blockchain in China can grow rapidly as a threat that could undermine the emission reduction effort being carried out in the country,” the researchers said.

Original Note: Bitcoin Blockchain Operations in China Threaten Climate Goals

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