After the Chinese authorities in 2021 introduced a ban on cryptocurrency mining in the country, including due to its lack of ecology, the carbon footprint of bitcoin has not decreased, but, conversely, has grown significantly. Why did this happen?
High Environmental Expectations
If before the ban on cryptocurrency mining in China, the share of this country in the Bitcoin hashrate was 44%, then after its introduction it fell to zero, and countries such as the USA, Kazakhstan, Canada and Russia took the lead.
One of the reasons for banning mining in China was, among other things, its non-ecological nature. According to research, the country’s mining farms could produce the same greenhouse gases, like the entire Philippines country, some individual Chinese cities or, for example, the entire electronics industry.
Environmentalists hoped that the migration of miners to other countries would make cryptocurrencies production more “carbon neutral” due to the use of renewable energy. Such a statement, in particular, was made by the head of the BTC.TOP mining pool Jiang Zhuer. But had their hopes been fulfilled?
What’s going on in reality?
Despite the positive expectations of environmentalists, the situation with the carbon footprint of mining after the deployment of miners from China to other countries does not take shape in the most rosy way. Plans for a more active use of green energy seem to have not yet been implemented.
According to a study on the environmental effects of Bitcoin mining, the use share of such energy in mining worldwide even decreased – from 42% two years ago to 25%, that is, the carbon footprint of the main cryptocurrency increased by 17 percentage points.
According to researchers, despite the fact that Chinese miners were accused of non-ecological cryptocurrency extraction, just they were more oriented towards “green electricity” than their counterparts in other countries. So, for example, the energy received from Chinese hydroelectric power plants was replaced by natural gas in the United States or coal electricity in Kazakhstan. As a result, carbon emissions from the Bitcoin network reached 65.4 megatons per year, which roughly corresponds to the same indicator for the whole Greece. Answering the question of what to do to still reduce environmental damage from mining, environmentalists proposed to introduce subsidies for those miners who use renewable energy for cryptocurrency mining, as, in their opinion, fight through public bans is just useless. Which, in particular, is clearly shown by the example of China.
By Dmitry Noskov, expert at StormGain cryptocurrency trading platform