The carbon emissions associated with mining bitcoin have accelerated rapidly in China, and they will soon outstrip the total annual emissions of mid-sized European countries.
Analysis by Guan Dabo at Tsinghua University in Beijing, China, and his colleagues suggests that the total carbon footprint of bitcoin mining in China will peak in 2024, releasing around 130 million metric tonnes of carbon.
This figure exceeds the annual carbon emissions of countries including Italy and the Czech Republic.
By 2024, bitcoin mining in China will require 297 terawatt-hours of energy and account for approximately 5.4 per cent of the carbon emissions from generating electricity in the country.
Mining bitcoin relies on computers racing to solve mathematical puzzles, with miners receiving bitcoin for being the first to process a batch of verified transactions.
The number of bitcoin awarded for this are halved every four years, and the puzzles have become more difficult and require more computing oomph to solve. The cost of powerful computer equipment and the electricity to run it has also increased.
The researchers predicted the emissions peak in China in 2024 based on calculations of when the overall cost of mining – the investment in computing equipment and the electricity costs – outweighs the financial rewards of selling mined bitcoin.
They used both financial projections and carbon emissions analysis to model the emissions footprint in China, taking into account factors such as location. “Are you in Shanghai, Beijing, or other places? That does matter because it determines what type of electricity you use,” says Guan. “Overall, from all of China’s bitcoin mining activity, 40 per cent is powered by coal.”
Bitcoin miners in Beijing or other parts of northern China are very likely to be using electricity from coal-powered plants. Mining in southern provinces – especially Guizhou, Yunnan and Sichuan – is in large part powered by hydroelectricity, says Guan.
Given China’s commitment to a 2060 net-zero carbon goal, regulations to reduce carbon emissions from bitcoin mining and future emergent sectors will need to be implemented, he says.
Journal reference: Nature Communications, DOI: 10.1038/s41467-021-22256-3