Policy assessments for the carbon emission flows and sustainability of Bitcoin blockchain operation in China

Abstract

The growing energy consumption and associated carbon emission of Bitcoin mining could potentially undermine global sustainable efforts. By investigating carbon emission flows of Bitcoin blockchain operation in China with a simulation-based Bitcoin blockchain carbon emission model, we find that without any policy interventions, the annual energy consumption of the Bitcoin blockchain in China is expected to peak in 2024 at 296.59 Twh and generate 130.50 million metric tons of carbon emission correspondingly. Internationally, this emission output would exceed the total annualized greenhouse gas emission output of the Czech Republic and Qatar. Domestically, it ranks in the top 10 among 182 cities and 42 industrial sectors in China. In this work, we show that moving away from the current punitive carbon tax policy to a site regulation policy which induces changes in the energy consumption structure of the mining activities is more effective in limiting carbon emission of Bitcoin blockchain operation.

Analyzing the Relationship between the PM2.5 Concentration and the Gini Coefficient Using the Grey Model

“…(4) Stricter rules on building factories are more effective than tougher environmental penalties. Like some scholars have suggested on the high carbon emission of the Bitcoin mining, moving away from the current punitive carbon tax policy to a site regulation policy of the Bitcoin mining is more effective in limiting the carbon emission of Bitcoin blockchain operation [33].…”

Analyzing asymmetric effects of cryptocurrency demand on environmental sustainability

“…Evidence from the study indicates cryptocurrency mining could be associated with 3–15 million tons of global carbon emissions (Kahn 2018 ). But the transaction per carbon emitted differs by country—for instance, numerous mining centers based in China are due to low setup cost, and heavy reliance on coal energy—which is, unfortunately, the most carbon-intensive place for mining cryptocurrencies (Jiang et al 2021 ). The volatility movement in cryptocurrency prices and the need to minimize operational costs including the cost of energy in order to maximize profit are important drivers in selecting a crypto mining site (Peck 2017 ).…”

“…A typical computer server that consumes about 1.5 kilowatts (kW) of power may cost between $3224 and $9000 for mining an individual coin (McGeeham 2018 ). Existing findings show that without a direct policy intervention in bitcoin blockchain mining, energy consumption in China is estimated to reach 296.59 TWh with a corresponding 130.50 million tons of carbon emissions in 2024 (Jiang et al 2021 ). However, the amount of renewable energy sources in Canada is higher relative to China, and similar amount of cryptocurrency mined in China may generate four times carbon emissions compared to Canada (Krause and Tolaymat 2018 ).…”

MiningVis: Visual Analytics of the Bitcoin Mining Economy

“…Alternative solutions, such as proof-of-stake, have been recently promoted to reduce the excessive energy consumption of cryptocurrencies [43]. Analyzing miners' revenue function and the environmental impact would help inform policy makers to develop sustainable mining regulation and policy [21,29,63,64].…”