China is cracking down on Bitcoin mining, and some experts fear that the cryptocurrency’s environmental footprint could become dirtier as a result.
Bitcoin is incredibly energy hungry. To create new coins, miners race to solve complex puzzles using specialized machines. As a result, Bitcoin is estimated to use as much electricity annually as the entire country of Poland. Until this year, a majority of that electricity came from a mix of coal and hydropower in China. Last week, China sounded the death knell for Bitcoin mining within its borders when it made all cryptocurrency transactions and mining illegal — although most mining operations fled earlier in the year when bans were announced in provinces where most had previously set up shop.
There are plenty of other countries and locations where electricity isnt as expensive to run or the environment. I think BTC is too large now that it can drop as many are predicting
Hi,
Your story is one side of a coin. There is another side. Do you know that Germany and the UK generated 40% of their energy in 2020 from renewables? And did you know that we turn the wind generators off due to lack of demand?
We need a shake up of the big six to encourage MORE use of electricity when it is underutilized and LESS use when it is at peak. Over 30 years ago I lived in Manila where they had a 3 tier electricity billing system. The first pittance of usage was below generating cost, the next tier was three times that cost and the top tier (for greedy and rich expatriates and business leaders) was three times the mid tier cost. Consequently, if you wanted to run six air conditioners in your apartment, you paid about 8 times generating cost. A fair deal if you ask me.
So why the hell can’t we do that in the “first world” and sell 23:00 hrs to 04:00 hrs at 5p / kWh and 07:00 thru 17:00 at a much higher rate? Because we have an effective monopoly of the big six and nobody (maybe except Octopus) has offered any variable tariffs per time of usage.
So charge the car battery overnight, and use it during the day to power the home. That is the end game of Musk
And did you know there are cryptos out there that exist to commoditize generation to the home level?
BTC mining is one of a thousand use cases to “normalize” consumption to production.
P.S. I have been in the energy sector since 1978.
You may find this a good read. I read it last week.
Do those figures include Nuclear, Biomass, Wood powered, waste powered and Hydro-electric ? If you are quoting Windmills and solar panels only then I sincerely dispute those figures and call for evidence !
[Edit - From THOSE Sources = even 10% would be far too high ! ]
Tiered electricity rates, to my understanding, would only drive down energy consumption. Leading consumers should be industry and commercial sectors. Raising rates should only disincentivize power consumption among the leading consumers. Even worse is if they stagnate and pass on the costs of goods/services to the average consumer. Not to mention higher barriers to entry, especially for potential BTC farms.
Just keeping the flat-rate and reducing it sounds more like a win-win in that case.
The paradoxical thing is that while China has successfully banished crypto, it also remains extremely bullish on blockchain, the digital ledger technology underpinning most cryptocurrencies. “[China’s President Xi Jinping] expressed a desire for China to be a leader in IoT, in AI, in blockchain.” Padilla says. “The plan is to capitalize on the benefits of blockchain without crypto.” so yes Bitcoins pollution could grow
As speculators we automatically associate blockchain technology with currency. When I read about blockchain the first time I thought it’d have a huge scope in areas of governance, auditing and security.
Imagine aid provided to emerging economies where fund disbursement is recorded on blockchains. Sure it won’t completely stop pilfering but it’ll provide a greater layer of transparency than they hold now.
Governments worldwide acknowledge the benefits of blockchain tech as a whole. They just hate cryptocurrencies as they are now. Not only are there negative implications around money laundering but it takes away the ability for governments to dictate fiscal and monetary policy. That’d be a huge blow.
On another note, Patrick Boyle, Palomar Capital, has a nuanced opinion on this whole China situation that was really interesting to hear
The evidence is in the statistical review from bp that I provided a link for. Admittedly, a long read, but this is my tenth year of reading it. All the data is there. No interpretation necessary.
Edited. I stand corrected. The table on page 65 shows the % of electricity generated by each source of energy. Both Germany and the UK generate 40% of their electricity using renewable sources. This is not the same as the total energy consumed in a country - only the electrical energy. So I appreciate the correction - it is important these things are discussed fully to avoid hype and errors in statements.
