These two responsibilities are not compatible and coin mining could jeopardize China’s climate goals.
Cryptocurrency mining undermines climate goals
Although not a well-known process, crypto currencies rely on a technology called blockchain. Roughly speaking, it is a shared database of transactions whose entries must be confirmed and encrypted.
This mining network is generated by “miners or miners” who use powerful computers to verify transactions. These machines consume absurd amounts of electricity, and the process was called into question by Bill Gates.
As a study published in Nature magazine reveals, Chinese Bitcoin mines, which consume enormous amounts of electricity, feed nearly 80% of the global crypto currency trade.
Of these, 40% are fed with coal, the rest with renewable energy.
This excessive consumption could undermine China’s goals to reduce carbon emissions by 2030 and achieve neutrality by 2060.
Clean energy could be the solution
According to the study, if no controls are implemented, mines in China will generate 130.5 million metric tons of carbon emissions by 2024. This figure is close to Saudi Arabia’s annual greenhouse gas emissions, for example, rich in oil.
The intensive operation of blockchain of Bitcoin currencies in China could grow rapidly as a threat that could potentially undermine the emission reduction effort.
Said Wang Shouyang, of the Chinese Academy of Sciences and co-author of the study.
In the opinion of the co-author, the government should direct its efforts towards updating the electricity grid, in order to guarantee a stable supply of energy from renewable sources.
Since energy prices in China’s clean energy regions are lower than in coal-fired regions, miners would then have more incentives to move to clean energy regions.
Although taxes could be required to regulate carbon emissions, miners would hardly be deterred by the profits available. In addition, even though the trade in cryptographic currencies has been banned since 2019, in China, mining is still allowed.
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