There are many mining farms in China that mine bitcoin and cryptocurrencies. These farms consume a lot of electricity, and this is causing the country a sustainability problem.
Indeed, according to a study published in Nature, the CO2 emissions generated by the growing energy consumption of bitcoin mining could threaten its climate change targets.
The study reveals that unless policy action is taken, the annual energy consumption of bitcoin mining in China is expected to peak in 2024 at 296.59 Twh, generating 130.50 million tonnes of carbon emissions.
The key point, as the same study points out, is precisely the policy interventions that could reduce emissions, since the operation of Bitcoin does not necessarily require all that much energy.
In this regard, however, the attitude of Chinese policy towards bitcoin mining is unclear.
Bitcoin mining in China
As Sky News reports, there are different policies in different parts of China.
The country consists of twenty-two provinces, five autonomous regions, four municipalities and two partially autonomous special administrative regions. Given the absence of a national policy in this respect, each region is acting de facto autonomously.
In Inner Mongolia, for example, some farms have already been closed down on their own initiative, while in other places where hydroelectricity is abundant, such as Sichuan, mining farms are being welcomed and favourable policies adopted.
The fact is that bitcoin mining can now be a very profitable business, if done with cheap electricity, and local governments have an interest in collecting taxes on these profits.
On the other hand, local governments themselves have their own carbon emission targets to meet, so much so that in this scenario there are those who compare the Chinese mining sector to a Wild West.
According to research by the University of Cambridge, 65% of the total Bitcoin hashrate is now located in China, making it the country most affected by this problem.
However, this is fundamentally only a political issue, because even if they banned mining, or required only zero-emission sources, or imposed very high taxes on mining, the Bitcoin network would still function without problems. The energy consumption is not due to the settings of the Bitcoin protocol, but to the free choice of the miners: it would be enough to convince or force them to consume less, and the problem could be solved.
