When China banned cryptocurrency mining last year, operations moved out of the country and into places that relied even more heavily on coal and other fossil fuels for energy generation. That made Bitcoin’s carbon footprint even worse than before, according to research published in Joule. After losing access to hydropower in China, just a quarter of Bitcoin mining power came from renewable sources in August.
“After China banned Bitcoin mining, everyone was expecting it to become more green, but we are somewhat surprisingly seeing the opposite happening.” Study co-author Alex de Vries told CNN. “A lot of the hydropower these miners got previously in China has now been replaced with natural gas from the U.S.”
Places such as Kazakhstan that source most of their energy from fossil fuels have become key centers of crypto mining. In the U.S., Kentucky has passed tax breaks for crypto miners who come to the coal-rich state as part of its efforts “to become a national leader in emerging industries which use substantial amounts of energy.”
“It’s bad news for Bitcoin owners because their holdings just got more dirty,” de Vries told the New York Times.
Crypto, and Bitcoin in particular, already had an image problem when it came to environmental responsibility. The study examining the developments since China outlawed mining shows things are getting worse, with mining from renewable sources down 17% from 2020 levels.
“It is not a shock to me that when China banned mining there, miners left and went to other countries and these other countries tend to have less available spare renewable capacity for the mining camps,” Benjamin A. Jones, an assistant professor in economics at the University of New Mexico who studies the environmental effects of crypto mining told the Times. “If true, their implication is that Bitcoin mining is moving in the wrong direction.”