Beijing’s ban on cryptocurrencies last year spurred an exodus of crypto miners to other countries, including places where renewable energy was less likely to be behind mining operations. Researchers now claim the environmental footprint of crypto mining is getting dirtier, upturning a common belief that the industry was moving toward a brighter, greener future, reports the New York Times.
A new peer-reviewed study in the energy research journal Joule says that there was a decline in renewable energy powering the Bitcoin network from 2020 to 2021, plummeting from a 2020 average of 42% to just 25% last August. Renewable sources like wind, solar or hydropower are increasingly being eclipsed by dirtier fuels like coal and other fossil fuels as Bitcoin mining transitions to countries like Kazakhstan and the United States.
“It’s bad news for Bitcoin owners because their holdings just got more dirty,” paper co-author Alex de Vries told the New York Times.
“There was a lot of optimism that China banning Bitcoin mining would make mining more green,” he said. “But the fact is, it was already a dirty business, and it just got worse.”
Crypto-mining already has a higher electricity use than most countries, gobbling up more electricity than all of Finland, a country of 5.5 million people.
A raft of research shows that renewable energy has long been thought to be a major component of crypto-mining, though new data suggest this is likely to change if current trends persist. Previous research logged by a survey at the Cambridge Centre for Alternative Finance showed that renewable energy accounted for an average of approximately 40% of global crypto-mining.
Other groups like the Bitcoin Mining Council have claimed almost 60% of crypto-mining relies on renewable energy, while digital asset investment company Coinshares estimates up to 73% of Bitcoin mining uses renewables.
“It is not a shock to me that when China banned mining there, miners left and went to other countries and these other countries tend to have less available spare renewable capacity for the mining camps,” Benjamin A. Jones, an assistant professor in economics at the University of New Mexico who studies the environmental effects of crypto-mining told the Times. “If true, their implication is that Bitcoin mining is moving in the wrong direction.”
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