The energy consumption of mining for cryptocurrencies, including BTC, in China will rival the entire greenhouse gas emission output of Italy within the next two years if allowed to continue unchecked, a new study has warned.
Bitcoins are created through mining, a process that requires computers to solve complicated mathematical equations and is extremely energy-intensive. The boom in the value of cryptocurrencies in recent years has triggered an “arms race” to sell dedicated mining hardware, the authors said.
Both energy consumption and the carbon emissions associated with mining cryptocurrency are on the rise in China to the point where they could undermine global sustainability without intervention, according to researchers from the Chinese Academy of Sciences and Tsinghua University in Beijing.
Authors Dabo Guan, Shouyang Wang and their colleagues used a simulated carbon emission model to track the emission flows of BTC blockchain operations in China, estimating that the process’ energy consumption will peak at around 297 terawatt-hours and generate around 130m metric tons of carbon emissions by 2024.
This is the equivalent of the entire annual greenhouse gas emissions of mid-sized countries such as Italy as registered in 2016, the Czech Republic or Qatar, the report, published in journal Nature, warned.
“The growing energy consumption and the environmental impacts of the BTC blockchain have posed problems for many countries, especially for China,” the authors wrote.
The BTC carbon footprint
The amount of electricity consumed by the BTC network in one year could power all tea kettles used to boil water in the UK for 30 years, or for 4.6 years across Europe (including the UK), according to research from the University of Cambridge.
BTC accounts for 0.55 per cent of total electricity production and 0.63 per cent of total electricity consumption, it has estimated.
The amount of electricity used annually by the network could satisfy the energy needs of the University of Cambridge for 778 years, while the amount of electricity consumed by always-on but inactive home devices in the US alone could power the BTC network for 1.6 years.
If BTC was a country, its electricity consumption would outstrip both Sweden and Ukraine, generating roughly 136.84 terawatt-hours each year, compared to Sweden’s 131.80 and Ukraine’s 128.81, it estimated, based on 2019 data. It would, however, lag slightly behind the likes of Malaysia (147.21) and Egypt (150.58).
“Without appropriate interventions and feasible policies, the intensive BTC blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort taking place in the country.”
While policy interventions are critical to addressing the issue, current policies such as carbon taxation are relatively ineffective at curbing the industry, it suggests.
Instead, individual site regulation policies for BTC miners could be the most effective means of changing the current energy consumption structure in China and lowering future emissions from the blockchain operation.
Researchers from the University of Cambridge estimated that mining BTC uses more electricity annually than the whole of Argentina, clocking in at around 121.36 terrawatt-hours annually.
China is by far the world’s highest-ranking country for electricity consumption, followed by the US and India, research from the university has found.
“It is really by design that BTC consumes that much electricity,” Michel Rauchs, Research Assistant at the Cambridge Centre for Alternative Finance, told the BBC in February.
“This is not something that will change in the future unless the BTC price is going to significantly go down.”