Researchers from Tsinghua University and the Chinese Academy of Sciences have said that China's power-hungry bitcoin mining empire could undermine the country's pledge to peak carbon emissions by 2030 and eventually go carbon neutral by 2060. The study, published Tuesday in Nature Communications, says that close to 40% of China's bitcoin mines are powered by coal and will produce 130.5 million metric tons of carbon emissions by 2024.
By investigating carbon emission flows of bitcoin blockchain operation in China with a simulation-based bitcoin blockchain carbon emission model, we find that without any policy interventions, the annual energy consumption of the bitcoin blockchain in China is expected to peak in 2024 at 296.59 Twh and generate 130.5 million metric tons of carbon emission correspondingly.
Bitcoin, after growing fivefold in the past year alone, eclipsed the $50,000 threshold in February and reached a record high of over $61,000 in March. It is the largest of the 6,600 cryptocurrencies tracked by CoinGecko and makes up more than 50% of the entire $2 trillion market cap of cryptocurrency.
Historically, the study claims that from January 1, 2016, through June 10, 2018, up to 13 million metric tons of carbon dioxide emissions were generated from bitcoin mining alone. As of April 2020, China alone accounted for 78.89% of the global blockchain operations. Should this trend continue, the emission output would exceed the total annual greenhouse gas emission output of Qatar and the Czech Republic.
With cheap electricity rates in the country and companies growing more benign towards cryptocurrency, Bitcoin mining is predicted to become even more ubiquitous in the near future. A study by the Cambridge Centre for Alternative Finance from August last year suggested that Bitcoin-related power consumption reached a record high last year with the equivalent of seven nuclear power plants (or 21.8 million solar panels) being pulled by the global mining industry alone.
Moving forward, the study suggests that imposing carbon taxes alone is not enough to mitigate carbon emissions. Instead, the Chinese government should focus on shifting the industry to renewable sources of energy.