ARE MINERS TRYING TO LOWER THEIR CARBON FOOTPRINT?
Yes. Some use surplus natural gas that would otherwise be “flared”, or burnt just to dispose of it, to generate power for mining.
Others have put solar panels on top of their server halls or struck up deals to source low-carbon nuclear power.
Many have set up shop in places like upstate New York, Canada, Iceland and Norway where there’s an abundance of emissions-free hydro or wind power.
That’s motivated as much by self-interest as concern for the climate – renewable power tends to be cheaper than other sources anyway.
SO ARE BITCOIN’S EMISSIONS FALLING?
It’s hard to tell.
The China ban in June 2021 deprived Bitcoin miners of the country’s clean, abundant hydropower and sent them off in search of any inexpensive, reliable energy they could find.
Some set up shop near renewable sources in the US. Others appeared in places like Kazakhstan, where fossil fuels still dominate the energy mix.
The impact of all this on Bitcoin’s carbon emissions is unclear as no one knows precisely where all the miners are and what type of power they use.
However, one study published by the research journal Joule in February suggested that Bitcoin’s environmental impact has worsened since China’s move, with the share of renewables used to power the network falling from more than 40 per cent in 2020 to about 25 per cent in August 2021.
And don’t overlook the environmental impact of the growing mountain of older computer gear being discarded by miners as they try to maintain an edge in processing power.
WHAT ARE GOVERNMENTS DOING?
In some parts of the world that enjoy surpluses of renewable power, Bitcoin miners are still welcome.
Texas, for example, is trying to attract more of them to act as a source of demand response to match the state’s variable wind output. In other places, they’re seen as a threat.
The Chinese ban was a response to a power deficit that forced it to ration electricity supply and cut industrial output.
Kazakhstan, a major Bitcoin producer, imposed limits on the industry after facing its own energy shortages.
Sweden’s financial regulator has called for a Europe-wide ban on crypto mining, saying it “threatens the climate transition that needs to happen urgently”.
Some governments would prefer to channel renewable power to older industries that are trying to decarbonise, such as transportation and manufacturing.
Other big power users complain that Bitcoin miners suck up limited energy resources with little return to the host country in jobs and tax revenue.