China’s cryptocurrency mining ban in the spring of 2021 significantly worsened the environmental impact of bitcoin, according to a new research on mining published in Joule. That’s because bitcoin miners were exploiting a significant amount of Chinese hydropower, which suddenly evaporated when China made mining illegal, said one of the study’s authors and a member of the School of Business and Economics at Vrije Universitt Amsterdam. Researcher Alex de Vries said.
So the miners took their business elsewhere, including in countries that use significantly dirtier energy than China. The electricity sources powering the bitcoin network were only 25.1% renewable in August 2021, which is about 17 percent less than the 2020 average.
The study found that mining bitcoin every year produces as much pollution as Greece did in 2019. A single bitcoin transaction results in the same carbon footprint as a passenger flying from New York to Amsterdam.
“After China banned bitcoin mining, everyone was expecting it to be more green, but we are surprisingly seeing the opposite happening.” De Vries said. “A lot of the hydropower that these miners previously received in China has now been replaced with natural gas from the US.”
Bitcoin mining is still booming in the United States. According to the study, many US bitcoin mines are powered by natural gas and coal. Kentucky now provides subsidies to crypto miners to attract business to the state’s coal industry. Kazakhstan has also become a destination for bitcoin miners. According to the study, the country’s electricity grid is dependent on hard coal, which is more polluting than the coal used in China.
The hydropower behind China’s bitcoin mines was frequently touted by cryptocurrency advocates to refute criticism about the technology’s environmental impact.
In May, Coinbase – one of the largest cryptocurrency markets – published a “fact check” citing China’s hydropower plants as an attempt to undermine the idea of bitcoin contributing to climate change.
Coinbase did not respond to CNN’s questions about whether it stands by its fact check in light of China’s cryptocurrency crackdown, but said in a statement that it believes “the industry is innovating at an encouraging pace to address these challenges.” Making… community-led change is possible and crypto can be part of the fight against climate change if we come together to solve these challenges.”
