A new study makes some stark warnings about how Bitcoin's carbon footprint will increase in the next three years.
A new study has warned that Bitcoin mining in China could generate 130.5 million tons of carbon emissions in just three years’ time — exceeding the total energy consumption of some of the world’s biggest economies.
Here’s another staggering way of putting it: This one country’s mining activity would create a footprint that equates to 14% of the CO2 generated by the aviation sector worldwide in 2019.
The report, published in the Nature journal, warns this could “potentially undermine the emission reduction effort” taking place in the country unless feasible policies are brought into force quickly.
Academics say that the Proof-of-Work consensus algorithm used by Bitcoin causes miners to engage in an arms race — dramatically increasing the blockchain’s energy consumption.
What Should Be Done?
The report argues that the current approach of imposing a carbon tax tends to be “relatively ineffective” for this industry — and instead, site regulation would be a better approach instead as this would encourage miners in coal-based areas to move their operations to places where more eco-friendly renewable energy sources are available in abundance. The authors wrote:
“Without any policy interventions, the carbon emission pattern of the Bitcoin blockchain will become a non-negligible barrier against the sustainability efforts of China. The peak annual energy consumption and carbon emission of the Bitcoin blockchain in China are expected to exceed those of some developed countries such as Italy, the Netherlands, Spain, and Czech Republic.”