China's electricity-hungry bitcoin mines that power nearly 80 per cent of the global trade in cryptocurrencies risk undercutting the country's climate goals, a study in the journal Nature said on Tuesday.

Bitcoin and other cryptocurrencies are minted by solving puzzles using powerful computers that consume enormous amounts of electricity -- much of it produced by coal plants.

The Nature study found that unchecked, China's bitcoin mines will generate 130.50 million metric tons of carbon emissions by 2024 -- close to the annual greenhouse gas emissions from Italy or oil-rich Saudi Arabia.

Chinese companies with access to cheap electricity and hardware handled 78.89 per cent of global bitcoin blockchain operations as of April 2020, the study said.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/cryptocurrency-market-value-crosses-2-trillion-mark-for-first-time-375846" hreflang="en">Cryptocurrency market value crosses $2 trillion mark for first time</a>

This involves minting new coins and keeping track of cryptocurrency transactions.

About 40 per cent of China's bitcoin mines are powered with coal, while the rest use renewables, the study said.

But the coal-guzzling rigs are so large they could end up undermining Beijing's pledge to peak carbon emissions before 2030 and become carbon neutral by 2060, it warned.

"The intensive bitcoin blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort," co-author Wang Shouyang from the Chinese Academy of Sciences told AFP.

The government should focus on upgrading the power grid to ensure a stable supply from renewable sources, Wang said.

"Since energy prices in clean-energy regions of China are lower than that in coal-powered regions... miners would then have more incentives to move to regions with clean energy."

This year the crypto-mining industry is expected to use 0.6 percent of the world's total electricity production, or more than the annual use of Norway, according to Cambridge University's Bitcoin Electricity Consumption Index.

The price of a bitcoin has surged fivefold in the past year, reaching a record high of over $61,000 in March, and is now hovering just below the $60,000 mark.

Given the profits available, Wang said imposing carbon taxes was not enough to deter miners.

China banned trading in cryptocurrencies in 2019 to prevent money laundering, but mining is permitted.

Coal-rich regions are now pushing out bitcoin miners as they struggle to curb emissions.

Last month, Inner Mongolia announced plans to end the power-hungry practice of cryptocurrency mining by the end of April after the region failed to meet annual energy consumption targets.

The region accounted for eight per cent of the computing power needed to run the global blockchain -- a set of online ledgers to record bitcoin transactions.

That is higher than the amount of computing power dedicated to blockchain in the United States.

Nasdaq-listed Bitmain, which operates one of the biggest cryptocurrency mining pools in the world, said they were shifting operations in Inner Mongolia to areas with more hydropower like Yunnan.

China's electricity-hungry bitcoin mines that power nearly 80 per cent of the global trade in cryptocurrencies risk undercutting the country's climate goals, a study in the journal Nature said on Tuesday.

China's electricity-hungry bitcoin mines that power nearly 80 per cent of the global trade in cryptocurrencies risk undercutting the country's climate goals, a study in the journal Nature said on Tuesday. Bitcoin and other cryptocurrencies are minted by solving puzzles using powerful computers that consume enormous amounts of electricity -- much of it produced by coal plants. The Nature study found that unchecked, China's bitcoin mines will generate 130.50 million metric tons of carbon emissions by 2024 -- close to the annual greenhouse gas emissions from Italy or oil-rich Saudi Arabia. Chinese companies with access to cheap electricity and hardware handled 78.89 per cent of global bitcoin blockchain operations as of April 2020, the study said. Also read | Cryptocurrency market value crosses $2 trillion mark for first time This involves minting new coins and keeping track of cryptocurrency transactions. About 40 per cent of China's bitcoin mines are powered with coal, while the rest use renewables, the study said. But the coal-guzzling rigs are so large they could end up undermining Beijing's pledge to peak carbon emissions before 2030 and become carbon neutral by 2060, it warned. "The intensive bitcoin blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort," co-author Wang Shouyang from the Chinese Academy of Sciences told AFP. The government should focus on upgrading the power grid to ensure a stable supply from renewable sources, Wang said. "Since energy prices in clean-energy regions of China are lower than that in coal-powered regions... miners would then have more incentives to move to regions with clean energy." This year the crypto-mining industry is expected to use 0.6 percent of the world's total electricity production, or more than the annual use of Norway, according to Cambridge University's Bitcoin Electricity Consumption Index. The price of a bitcoin has surged fivefold in the past year, reaching a record high of over $61,000 in March, and is now hovering just below the $60,000 mark. Given the profits available, Wang said imposing carbon taxes was not enough to deter miners. China banned trading in cryptocurrencies in 2019 to prevent money laundering, but mining is permitted. Coal-rich regions are now pushing out bitcoin miners as they struggle to curb emissions. Last month, Inner Mongolia announced plans to end the power-hungry practice of cryptocurrency mining by the end of April after the region failed to meet annual energy consumption targets. The region accounted for eight per cent of the computing power needed to run the global blockchain -- a set of online ledgers to record bitcoin transactions. That is higher than the amount of computing power dedicated to blockchain in the United States. Nasdaq-listed Bitmain, which operates one of the biggest cryptocurrency mining pools in the world, said they were shifting operations in Inner Mongolia to areas with more hydropower like Yunnan.

China's bitcoin mining rush risks derailing climate goals

Bitcoin slumped to a six-month low on Friday after China's central bank launched a fresh crackdown on cryptocurrencies, warning of the risks entailed in issuing or trading them.

Bitcoin, the world's biggest cryptocurrency, fell 9% to $6,929, its lowest since May, and was last down 7% at $7,107.

The People's Bank of China's Shanghai headquarters said it would tackle growing cases of illegality involving virtual currencies. It also cautioned investors not to confuse crypto with blockchain technology, the digital ledger that underpins many cryptocurrencies such as bitcoin.

The move came a day after regulators in Shenzhen launched a similar campaign, and came as the PBOC prepares to launch its own digital currency.

Chinese President Xi Jinping said last month that the world's second-biggest economy should accelerate the development of blockchain technology.

Bitcoin, known for its wild price swings, soared over 40% in two days after Xi's remarks, with investors betting that Beijing's backing of blockchain and plans for a digital renminbi would accelerate the mainstream embrace of cryptocurrencies.

But since late October bitcoin has slumped by nearly a third.

Jamie Farquhar, portfolio manager at London-based crypto firm NKB Group, said the PBOC statement crystallised a growing sense among crypto investors that China's embrace of blockchain would be unlikely to include cryptocurrencies like bitcoin.

"It's the realisation that the positivity over Xi's blockchain announcement was exaggerated," he said. "It may not include bitcoin at this point."

 
&nbsp;

Bitcoin slumped to a six-month low on Friday after China's central bank launched a fresh crackdown on cryptocurrencies, warning of the risks entailed in issuing or trading them.

Bitcoin slumped to a six-month low on Friday after China's central bank launched a fresh crackdown on cryptocurrencies, warning of the risks entailed in issuing or trading them. Bitcoin, the world's biggest cryptocurrency, fell 9% to $6,929, its lowest since May, and was last down 7% at $7,107. The People's Bank of China's Shanghai headquarters said it would tackle growing cases of illegality involving virtual currencies. It also cautioned investors not to confuse crypto with blockchain technology, the digital ledger that underpins many cryptocurrencies such as bitcoin. The move came a day after regulators in Shenzhen launched a similar campaign, and came as the PBOC prepares to launch its own digital currency. Chinese President Xi Jinping said last month that the world's second-biggest economy should accelerate the development of blockchain technology. Bitcoin, known for its wild price swings, soared over 40% in two days after Xi's remarks, with investors betting that Beijing's backing of blockchain and plans for a digital renminbi would accelerate the mainstream embrace of cryptocurrencies. But since late October bitcoin has slumped by nearly a third. Jamie Farquhar, portfolio manager at London-based crypto firm NKB Group, said the PBOC statement crystallised a growing sense among crypto investors that China's embrace of blockchain would be unlikely to include cryptocurrencies like bitcoin. "It's the realisation that the positivity over Xi's blockchain announcement was exaggerated," he said. "It may not include bitcoin at this point."

Bitcoin plummets to a six-month low on China crackdown

bitcoin-china

Bitcoin China, News on Bitcoin China, stories on Bitcoin China, articles on Bitcoin China, Bitcoin China stories at Wion, Bitcoin China news, Bitcoin China latest news

bitcoin china

China's bitcoin mining rush risks derailing climate goals

Bitcoin plummets to a six-month low on China crackdown