In the past few months, many environmentalists have suspected that the process of mining the main cryptocurrency, which is becoming more complicated and requires more and more energy, is having too much global climate impact of Bitcoin. Despite the fact that it is difficult to accurately measure exactly how much energy is currently required for crypto mining, the researchers of this issue publish data in official sources, based on data on the energy consumption of the equipment used for this.
Researchers also determine the geography of the location of the main mining farms in order to determine the possibilities for regulating this process at the level of governments of the states where the main capacities of crypto mining equipment are located. Due to the fact that the UN recently declared an emergency global climate situation, some researchers have announced that an increase in cryptocurrency mining alone can significantly increase the average global temperature up to 4 degrees Celsius.
In turn, most miners say that these estimates are very high and have nothing to do with the actual state of things, since in most cases they try to use not energy from burning coal. Most often, miners try to use more affordable and more environmentally friendly sources of energy, such as the energy of hydroelectric power plants, solar panels and wind energy, i.e. renewable energy sources.
These statements of crypto miners are confirmed thanks to information released by the largest Chinese companies, manufacturers of most mining equipment, in connection with their preparation to go to the initial public offering. Three of the world’s largest manufacturers of such equipment from China have revealed many details about market share and technical details of production, which made it possible to find out information about this, which is usually not made public.
Now, global climate impact of Bitcoin researchers have learned in detail about what equipment is used and where. It also became possible to understand where this equipment for mining cryptocurrencies receives electricity. It turned out that the most affordable abandoned production facilities are most often used to create large mining farms. Electricity for their production uses cheaper renewable energy, the source of which is not hydrocarbon sources. The latter type of energy sources is inefficient and costly in the increasingly energy-consuming business of cryptocurrency mining in light of the ever-increasing complexity of computing operations.
This actually explains why the fears of many ecologists on the conservative side of more worrying estimates are not justified, although taking into account mining of other popular cryptocurrencies, except Bitcoin, energy costs can double in the coming years.
Cryptocurrency, blockchain and artificial intelligence in the context of Global Climate Impact of Bitcoin
Despite this real state of affairs, the governments of various states and regions are beginning to demand from mining large enterprises the construction of their renewable energy sources. The complex mathematics required to perform calculations in the production of crypto coins requires more and more energy every year than traditional sources such as coal-fired power plants are forced to increase the use of burning coal and other hydrocarbon pollutions of the atmosphere. It is in this connection that governments begin to tighten regulation in this area.
In addition, government agencies are concerned that they are not able to control or somehow influence cryptocurrencies, as well as their production. They refer to the fact that such a feature of the crypto economy does not allow to determine exactly who, where and how much energy is spent on cryptocurrency mining.
According to experts over the past year, the complexity of the calculations required to produce one unit of cryptocurrency increased 4 times, which could not but affect the energy consumption and global climate impact of Bitcoin. This in no way can bypass such an aspect of electric energy production as the emission of greenhouse gases into the atmosphere.
However, cryptocurrency enthusiasts and experts in the field of blockchain technology do not agree with such statements by officials and argue that the role of renewable energy sources is much greater in the production of new units of cryptocurrency. In addition, cryptocurrency mining has now changed a little and most of this process is coordinated by pulls, combining many manners. Thanks to this, you can approximately determine the geographical location of large mining enterprises by the IP addresses of servers and devices of a particular mining pool.
This can be compared with large data centers of large companies, which also consume large amounts of energy and strive to use the most efficient and affordable energy sources, most of which are of renewable nature, to maintain the functioning of their servers. In addition, the miners of each pool have the opportunity to choose from which source they use energy for greater process efficiency. Due to this opportunity, the main mining industries are concentrated in such places of the globe, where there is access to renewable cheap hydro energy, wind and thermal energy. Crypto experts cite a figure of almost 75% when they talk about the share of renewable energy used in cryptocurrency mining.
Does cryptocurrency heating up the planet?
The main consumer of energy, not only when it comes to crypto mining, is currently China. The largest country in the world is not only the largest manner of cryptocurrencies, but also has the largest deposits of minerals, especially rare earth metals, widely used in the production of any high-tech devices, including equipment for cryptocurrency mining machines.
This country is also the largest and main producer of mining equipment. However, the regions of China have unequal provision with cheap renewable electricity. In the southern provinces of the country there are a large number of hydroelectric power plants that provide cheap green energy. This part of the country is becoming highly attractive for the location of large mining farms there, however it occupies a share of only a little more than half of all cryptocurrency mining industries.
Many experts agree that if there were more acceptable legislation in the southern provinces, such as Sichuan, it could take a leading position in the allocation of cryptocurrency mining enterprises. However, the Chinese government does not yet intend to create attractive conditions for miners and even threatens to legally ban the production of cryptocurrencies due to the high energy consumption for these purposes.
The governments of some US states, popular among cryptocurrency miners, in turn, plan to increase the cost of electricity for cryptocurrency miners. Cryptocurrency mining undoubtedly contributes to the increase in the atmospheric carbon monoxide content of global climate impact of Bitcoin, but this amount annually can be only a small part of our carbon emissions, comparable to the production of such an average city. All experts recognize that most of the hydrocarbon emissions are provided by metallurgical production, lighting and heating of our homes and workers, agriculture and transport.
Most likely, the governments of various states are thus trying, through various regulatory measures, to exert at least some influence on cryptocurrencies and crypto markets, since they do not have a direct impact on them.