Truthout - February 2021

... People can purchase Bitcoin on exchanges, but they can also obtain Bitcoin by “mining” it. Bitcoin mining is the process by which new Bitcoin is added into circulation. About every 10 minutes, a new “block” is added to the Bitcoin blockchain. The first miner to both verify 1 megabyte worth of transactions on the network, and correctly identify a 64-digit hexadecimal number associated with the new block (called “proof of work”), receives 6.25 Bitcoins as a reward. Those 6.25 Bitcoins are currently worth about $293,000 with Bitcoin trading around $47,000. Identifying this number is essentially guesswork, and requires a ton of computing power to do. Miners can mine up to a hard limit of 21 million Bitcoin (there are currently 18.5 million Bitcoin in circulation).

To be profitable, Bitcoin miners need to operate in areas where the price of electricity is low, because the practice uses a lot of energy. That often means mining in areas with some of the dirtiest energy. Research from the University of Cambridge shows that about one-third of global Bitcoin production occurred in Xinjiang, China. As Bloomberg reports, Bitcoin miners are drawn to Xinjiang because its power rates are extremely low, “as little as 0.22 yuan ($0.03) per kilowatt-hour, compared with 0.6 to 0.7 yuan in central China.” While Xinjiang is developing renewable wind turbine-powered energy, the majority of electricity in the region is generated from coal.

That’s part of the reason why Bitcoin mining has a growing environmental impact. In 2018, Princeton Professor Arvind Narayanan estimated in congressional testimony that the Bitcoin network accounted for slightly under 1 percent of world electricity consumption — a bit more than the electricity consumption of the state of Ohio or the state of New York. Scientists writing in the journal Nature warned in 2018 that Bitcoin’s growth could single-handedly push global emissions above 2 degrees Celsius. More recent estimates found that the carbon emissions of Bitcoin mining “sits between the levels produced by the nations of Jordan and Sri Lanka.” The University of Cambridge Judge Business School’s Bitcoin Electricity Consumption Index estimates that Bitcoin mining will consume more than 120 terawatt-hours of electricity globally this year — more energy than Argentina. (One terawatt-hour is equal to outputting 1 trillion watts of energy for one hour.) Researchers have also found that Bitcoin mining is more energy-intensive than mining both gold and platinum. ...
Read full report at Truthout