China’s cheap energy allows old mining equipment to operate, contradicting the argument for the evolution of equipment efficiency. Some receive the study with skepticism because they consider that it suffers from a series of limitations on the data that it presents.
China and the former USSR adequately managed the protection of the environment within their economies. In contrast to the West, these countries were able to regulate carbon emissions and accurately set goals. That was before Bitcoin mining emerged to become a threat to China’s green goals.
A study by Nature Communications warns about the contaminating potential behind the main cryptocurrency on the market. Although there have been many debates on this topic for years, there seem to be clues to support the publication in question.
Enthusiasts usually defend the mining business by arguing the evolutionary potential of the equipment. Since mining has expanded to various countries, manufacturers have had to adapt their machines to more demanding conditions of electricity rates. For that reason, ASICs have become increasingly energy-efficient.
Bitcoin Mining Threatens China’s Environmental Goals
It is striking that Bitcoin mining is threatening the goals of a superpower with a planned economy. The low cost of electricity in that Asian country allows keeping old mining equipment operational.
This contradicts the argument for the evolution of equipment efficiency. China concentrates more than half of the world’s farms, most of which operate with high-consumption equipment.
All cryptocurrencies mineable with the Proof-of-Work (PoW) protocol have the same nature of consumption as Bitcoin. According to the study, Bitcoin mining is seriously threatening China’s goals of becoming an environmentally friendly nation.
They explain that carbon emissions will reach worrying levels if no intervention regulates the growth of the business. “Energy consumption is increasing along with carbon emissions from mining. This situation could erode environmental efforts in the world,” they say.
China Must Face a Rival Threatening Its Plans
Beijing has set goals that Bitcoin mining is threatening, which suggests a potential crash. Chinese President Xi Jinping predicted that the country will have controlled carbon emissions by 2030. He also assured that China would be carbon neutral by 2060.
However, Bitcoin mining seems to be running counter to this view of the Chinese premier. The energy consumption of this business is 128.84 terawatt-hours per year, equivalent to the consumption of countries such as Ukraine or Argentina.
The pace of growth of the business suggests that the consumption will be 296.59 terawatt-hours per year by 2024, in China alone. This would equal 130.50 million metric tons of carbon, according to the study. At that time, the energy consumption would be equivalent to that of Saudi Arabia or Italy.
The Study “Leaves Much to Be Desired” Due to Data Limitations
The Nature study seems to be well-founded, but some have received it with skepticism. For example, Nic Carter from Castle Island Ventures considers that it suffers from a series of limitations on the data that it presents. He said on his Twitter account that the publication “leaves much to be desired.”
Carter believes that the study is not able to distinguish the types of energy used in Bitcoin mining.
Aside from the debate between environmental and Bitcoin advocates aside, China is already taking action. For example, the authorities are intensifying their hostile position against Bitcoin mining in the Inner Mongolia province.
By Alexander Salazar