The sweeping ban on cryptocurrency in China has delivered a blow to the industry for its adverse impact on the environment. But emissions from such sectors can grow as a result unless and until other countries are following the lead of China. The value of bitcoin has tumbled in the last week as the central bank of China has urged banks and payment firms in the country to crack down on crypto trading. It is one of the latest tightening restrictions on the industry by Beijing.
This is quite good news for the climate activists, who have voiced their concerns over the potential of the energy-sucking crypto mining industry to disrupt the international efforts to arrest global warming.
Bitcoin and other cryptos are created or mined with high-powered computers, which compete to solve complex mathematical puzzles. It has been guzzling more energy and fueling global warming emissions unless they consume electricity from renewable sources.
The recent moves of Beijing have paralyzed the Chinese industry. It is accounting for more than half of the global crypto production, which is making it much difficult for individuals in China to trade digital coins.
But with the cutting off of access to the Chinese power grid, these new restrictions can push the miners to the dirty sources of electricity. Peter Howson, a senior lecturer in international development at the Northumbria University in Britain thinks, China produces a large amount of cheap hydroelectricity. All of these are now much off-limits for bitcoin miners. The industry experts are predicting that the crypto production will pick up the Chinese miners from elsewhere to sell off their machines or seek help from abroad.
This crackdown will more likely increase the emission-related to bitcoin mining. Opportunities are also there for bitcoin miners to turn greener, as Alex de Vries thinks. Earlier, cryptocurrency has made its boom in Georgia, where hydroelectric powers are used mostly. It has caused a spike in the energy demand and rolling-off power outages in the region of Abkhazia. Some of the Chinese miners are also selling up while others are moving out. The state is currently in bad shape for bitcoiners.
A few months ago, some outages left millions of people without power. Hundreds of people have lost their lives. Hence Howson thinks, “It’s really important now that governments take steps to ban the import of bitcoin mining machines.”
He said, “Just like the global trade in Chinese tiger parts, bitcoin mining needs to be managed as an environmental crime.”