Unclean coins from China could be undermining Bitcoin’s role as an emerging global financial force, while also derailing China’s proposed carbon emission goals in the coming years, reports the Guardian, in reference to a new study published by Nature.
Chinese ‘Blood Coins’ Taint Bitcoin’s Image
The study revealed that between 75%-80% of all Bitcoin mining takes place in China, usually in provinces where electricity is cheap, and powered by fossil fuels. An estimated 40% of Bitcoin’s mining farms – giant warehouses where computer processors run day and night – are powered by coal, while some do make use of renewable energy sources where available, the study stated.
In the U.S, celebrity investor Kevin O’Leary, of Shark Tank fame, revealed to CNBC that any Bitcoins purchased from miners located in China were tainted with blood. O’Leary used the term ‘blood coins’ for those Bitcoin purchased using energy derived from fossil fuels, and declared that any future business conducted with Bitcoin would only be done with ‘clean coins’ – those sourced from miners using green energy.
The Nature study estimated that by 2024, the energy consumption from Bitcoin mining alone would exceed the combined yearly output of the Czech Republic and Qatar. This runs afoul of China’s purported goal to reach peak carbon by 2030, with an aim to then reduce its output towards carbon neutrality by 2060.
Carbon Output Targets Could Be Missed
Co-author of the paper, Wang Shouyang, from the Chinese Academy of Sciences, told the Guardian that China’s status as a global magnet for Bitcoin miners stood to undermine the country’s carbon output targets.
“The intensive bitcoin blockchain operation in China can quickly grow as a threat that could potentially undermine the emission reduction effort,” said Wang.
But as China gears more towards converting to green energy, the hope is that Bitcoin miners can be enticed into regions where mining can be sustained with renewable energy 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.”
Bitcoin mining continues unabated in the west, as U.K-traded mining firm Argo Blockchain posted its best financial quarter to date, after recording growth for three months straight. Argo is a publicly traded company headquartered in London, with hydroelectric Bitcoin mining farms scattered across Canada. The firm recently announced plans to build a 320-acre Bitcoin mining farm in Texas, to be powered by renewable energy.