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

Bitcoin is not just China’s problem

In an attempt to reduce bitcoin’s environmental impacts in China, the coal-dependent province of Inner Mongolia recently banned bitcoin mining and set up a hotline to report suspected transgressors. But on average, mining just one bitcoin per day requires a US$1.8 million (£1.3 million) investment in specialist equipment. Expulsions from the province could force some highly invested bitcoiners underground, while forcing others to find new places to park up in neighbouring countries which don’t have China’s seasonal glut of renewable energy.

To prevent an influx of Chinese miners chasing cheaper electricity, Iran’s President recently clamped down on new oil-fuelled mining, which authorities blame for increasing urban smog. The Black Sea territory of Abkhazia is trying to hold back foreign miners as officials there are forced to introduce rolling blackouts due to energy shortages. Bitcoin mining has been blamed for overloaded electricity lines and power station fires, leaving some areas without power for days.

UK authorities have also paid the price for bitcoin’s boom. In May 2021, officers from West Midlands Police in the UK, believing they were raiding an illegal cannabis farm in Sandwell, instead discovered around 100 bitcoin mining machines running off an improvised connection to the electricity supply. The outdated machines were so inefficient that they could only turn a profit with stolen energy. These thefts raise energy prices for everyone else, causing fuel poverty and risking public safety.

Antisocial side effects

Demand for mining machines has caused computer chip shortages, hurting more useful industries struggling back to work post-COVID. UK carmakers have cut production while smartphone companies have delayed future launches. The price of specialist chips used by the likes of Intel and Apple have increased by around 70% so far in 2021, with knock-on effects for UK consumers.

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

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