Bitcoin is now generating more carbon emissions than a mid-size European country as the world’s largest cryptocurrency has soared in value over the past several years, according to research recently published in Nature Communications.
The findings received worldwide media coverage, including the BBC, the Guardian, the Economist, CNN, Forbes, and the New York Times.
Professor Yu Xiong, Fellow of the University of Cambridge Institute for Sustainability Leadership (CISL), and Professor at Surrey University is one of the authors, along with collaborators from Tsinghua University, Cornell University, and the Chinese Academy of Science.
The increasing energy use and carbon emissions of bitcoin mining could have particularly strong impacts in China, which powers nearly 80% of the global trade in cryptocurrencies. Many of China’s bitcoin mines are powered by coal.
China is a key signatory of the Paris Agreement and has pledged to be carbon neutral by 2060. However, the country remains the world's largest contributor of greenhouse gases, and the study's authors say bitcoin mining could compromise the country's attempts to reduce its emissions.
"Since the bitcoin mining industry is so new, it has not been properly accounted for and regulated around the world," co-author Professor Shouyang Wang from the Chinese Academy of Science told CNN Business.
“It is really by design that bitcoin consumes that much electricity,” Michel Rauchs, Research Assistant at the Cambridge Centre for Alternative Finance, told the BBC in February.
“There are a number of important actions we need to take in order to limit the carbon emissions from bitcoin and other cryptocurrencies,” said Xiong. “First, the relevant government departments should actively guide the rational deployment of bitcoin mining pools, and conduct energy monitoring on all mining activities. They should try to guide the cryptocurrency or blockchain mining activities in regions that are rich in renewable energy and where there is a need to create more jobs. This can promote economic development and environmental improvement.
“Second, regulations and rules should be enacted as soon as possible to standardise bitcoin's coin mining behaviour, and explicitly require that only renewable energy sources such as solar energy and hydrogen energy can be used for cryptocurrency mining. In the meantime, the government should act to increase the cost of mining, when using traditional energy sources. It is critical to make use of the influence and popularity of the blockchain industry to demonstrate how a zero carbon industry could be achieved.
“Third, we should study, formulate and guide the use of blockchain consensus algorithms with lower energy consumption. While we save as much energy as possible, we still achieve the purpose of providing technology authentication to serve the society with the great value from the blockchain technology. It is important to promote the sustainable development of the cryptocurrency industry, enabling both hardware and software systems with lower energy costs.”