Bitcoins as a threat to climate protection
In 2024, Chinese Bitcoin miners could consume as much energy as the entire country of Italy. This is the result of studies conducted by a US-Chinese research team that has used sophisticated models to simulate the future development of the cryptocurrency. According to them, the current run on Bitcoins will continue for years to come. And if the Chinese government doesn’t take smart countermeasures, the trend could even undermine the country's climate protection efforts, the scientists warn in «Nature Communications».
Bitcoins are based on blockchain technology. In principle, anyone can use this technology to create new digital coins, which are then worth hard cash. To do this, however, he or she must have a computer solve special computational tasks. This is worthwhile in countries with low electricity costs – and with powerful hardware that performs the calculations as energy efficiently as possible.
It’s been known for some time that the growing Bitcoin industry is very energy-intense. The team led by Shangrong Jiang from the University of the Chinese Academy of Sciences now wanted to find out how much more energy might be consumed in the future. To do this, the researchers developed four scenarios that include the market as well as possible political responses.
Not peaked yet
Accordingly, without political intervention or unforeseen price crashes, the Bitcoin hype will not peak until 2024. In China, cryptocurrency mining could then consume 297 terawatt hours of electricity per year – a whopping five percent of the nation's electricity demand – and release 130 million tons of CO₂ in the process. In the long run, the business is predicted to become less attractive, in part because cryptocurrency is designed in such a way that the computational tasks required for a coin become more demanding over time. Yet, the authors write that, until then, the run on cryptocurrencies slows down climate protection efforts.
They advocate making cryptomining more environmentally friendly with targeted legislation, such as a CO₂ tax or minimum energy efficiency requirements for miners. According to the research team, it would be even better if mining were only allowed in regions with a high proportion of hydropower, and not where it currently often takes place: in areas that primarily get their electricity from coal-fired power plants.
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