Bitcoin’s carbon dioxide pollution has gotten even worse since China ousted Bitcoin miners last year, according to a new analysis. It’s likely the result of Bitcoin miners substituting China’s abundant hydropower with coal and gas, experts say.
“We actually see Bitcoin becoming less green than ever before,” says Alex de Vries, lead author of the analysis published last week in the journal Joule. That directly counters continued claims by industry groups that renewable energy would clean up Bitcoin’s operations.
The new report shows that the Bitcoin boom is becoming a bigger problem for the world’s efforts to eliminate fossil fuel pollution. Mining bans, like the one China put in place last year, don’t seem to be very effective in curbing emissions, de Vries points out, because miners can easily find cheap, dirty energy elsewhere.
Bitcoin currently has a carbon footprint comparable to the Czech Republic’s
Bitcoin currently has a carbon footprint comparable to the Czech Republic’s, according to de Vries’ estimate. The cryptocurrency generates so many greenhouse gas emissions, thanks to the super energy-hungry process of mining new coins. Miners essentially race to solve ever-more-complex puzzles in order to verify transactions on the Bitcoin blockchain, receiving new coins as a reward. The hardware they use to solve those puzzles burns through vast amounts of electricity (and also adds to the world’s growing e-waste problem).
China was home to over 70 percent of the world’s Bitcoin mining operations until the country kicked them out in 2021, purportedly in part because of environmental concerns. During China’s wet seasons, miners were able to take advantage of excess hydropower in the country’s Sichuan and Yunnan provinces. During the dry season, they typically moved to Xinjiang and Inner Mongolia — where they relied primarily on electricity from coal-fired power plants.
Now, the US and Kazakhstan are the two biggest hubs for Bitcoin mining. Kazakhstan hosts about 18 percent of the world’s Bitcoin mining, according to the Cambridge Centre for Alternative Finance. While coal dominates both China and Kazakhstan’s energy mixes, Kazakhstan relies primarily on hard coal that releases even more planet-heating CO2 than other types of coal. On top of that, it’s also home to less-efficient power plants, which might have also contributed to a rise in emissions.
The US hosts over a third of the world’s Bitcoin mining and relies most heavily on gas followed by coal for its electricity. The share of natural gas used to power Bitcoin mining roughly doubled from 15 to 30 percent after miners left China, de Vries and his colleagues find. The share of renewable sources of electricity used for Bitcoin mining also dropped significantly, from an average of about 42 percent in 2020 to 25 percent in August of the following year, according to the new analysis.
In the past, estimates for how much Bitcoin miners rely on renewable energy have varied substantially from about 40 to 70 percent, in part because miners moved from season to season, chasing the most affordable sources of energy. De Vries and his co-authors’ estimates are based on average emissions from the electricity mix in new places where miners set up shop, a method that has some limitations. It doesn’t capture the full impact of mining companies that have recently bought gas, coal, and coal ash-fired power plants for their personal use.
“That’s the worst possible thing you can have,” de Vries says, because it revives and extends the lives of aging fossil fuel power plants that would need to be phased out to meet global climate goals. The trend has also troubled some US Congress members, who have probed mining companies to divulge their energy use and emissions.