Bitcoin: China's Crackdown Isn't Enough – Only A Global Effort Can Stop Crypto's Monstrous Energy Demand

Huge concrete data centres, permanently plugged into power plants and telephone exchanges, maintain much of online life. But the infrastructure behind internet-based cryptocurrencies such as bitcoin, dogecoin and ethereum is more like a rusty travelling circus. And right now, that circus is on the road.

Bitcoin relies on a network of millions of specialist machines, known as miners, around 70% of which are currently based in China. Like a never-ending game of Hungry Hippos, each player hammers their mining machines 24/7 to try and scoop up as many bitcoins as possible. With only a few hippos, its easy for everyone to be a winner. But with around 2.5 million miners chasing an ever-shrinking number of prizes, the game is becoming increasingly difficult.

bitcoin coin

Image Source: Unsplash

Bitcoin’s booming popularity has caused its electricity demand to swell. With no central planning, a perpetual arms race for equipment continues, creating 15,000 tonnes of burned out electronic waste annually.

To maximise profits, mining machines are often crammed into shipping containers, with operators ready to up sticks at a moment’s notice to find the cheapest sources of energy. During China’s summer rain season, hydro power plants in the south-western provinces generate so much energy that miners can mop up the leftovers. But in the winter dry season, many miners unplug and hit the road, heading for the coal-fired power plants scattered across China’s vast northern territories.

Recent crypto price increases have encouraged some Chinese bitcoiners to mine coal and restart idle power plants without permission, endangering lives and threatening President Xi Jinping’s climate goals.

Bitcoin’s energy demand has more than doubled in a year from 55 terawatt-hours (TWh) to 125 TWh. The network now has a carbon footprint similar to the whole of Poland. Chinese regulators closed down all the country’s crypto exchanges in 2017. Even so, rocketing demand for bitcoin elsewhere means the network’s energy use in China is predicted to peak by 2024 at around 300 TWh. That’s equivalent to the total energy demand of the UK. With a crypto circus in tow, Beijing’s commitments to cut carbon emissions by 65% before 2030 would be near impossible to meet.

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Disclosure: This article is republished from The Conversation under a Creative Commons license.

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