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China's bitcoin mining industry may torpedo climate targets

By Adrian Holliday

10:42, 7 April 2021

Picture of crypto prices

Respected journal Nature has raised more environmental concern about the sustainability of China’s energy-hungry bitcoin mines. Though the majority of China’s bitcoin mines are powered by renewable energy sources, around 40% of the mines are coal-powered.

Nature says these mines are now so energy-rapacious they could push China away from hitting its 2030 peak emissions carbon emissions target, not to mention the 2060 target by which China wants to be carbon neutral. 

Hardware arms race

Another concern Nature raises is that the swirling financial speculation about Bitcoin – up 500% in the last 12 months – has caused an arms race in mining hardware, evolving over several generations. 

“Initially, miners used the basic Central Processing Unit (CPU) on general-purpose computers. Then, a shift was made to the Graphic Processing Unit (GPU) that offered more power and higher hash rates than the CPU.” 

Then, Application-Specific Integrated Circuits (ASICs) were introduced, optimized to perform super-fast hashing calculations, says Nature. 

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Short position overnight fee 0.0137%
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Spread 0.01168

China currently takes around 75% of all global Bitcoin blockchain operations and peak annual energy consumption and carbon emissions are expected to exceed those of developed countries like Italy, the Netherlands, Spain, and Czech Republic, Nature predicts.

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The Mongolian Connection

“In fact, energy consumed by Chinese Bitcoin blockchain in 2024 will exceed the energy consumption level of Italy and Saudi Arabia in 2016.” 

Nearby Inner Mongolia has supplied around 8% of the computing power needed to support the global blockchain network but the Mongolian government has announced plans to end crypto mining to help it meet energy consumption targets. 

The Guardian today claimed that the crypto mining industry is now tipped to suck up 0.6% of the world’s total electricity production – more than the total annual use of Norway.

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