Bitcoin Mining Bans Could Worsen Carbon Emissions, Study Finds

As the fight against climate change is at the heart of global concerns, some governments are considering banning Bitcoin mining, an energy-intensive process often criticized for its environmental impact.

As the world grapples with the climate crisis, some governments are considering banning Bitcoin mining, an energy-intensive process that has faced scrutiny for its environmental impact. However, a new study led by the research group Exponential Science reveals a surprising paradox: banning Bitcoin mining could lead to higher carbon emissions, ultimately undermining climate goals. The study, titled The Unexpected Carbon Consequences of Bitcoin Mining Bans: A Paradox in Environmental Policy, delves into the potential displacement effects caused by these bans.

The paradoxical consequences of Bitcoin mining bans According to the researchers at Exponential Science, bans on Bitcoin mining can have paradoxical effects, driving miners to relocate to regions with more carbon-intensive energy sources. “A ban in the United States or Europe could actually exacerbate global carbon emissions, as miners would move to countries that rely on fossil fuels,” explains Juan Ignacio Ibañez, a contributor to the study. To illustrate, the study indicates that a mining ban in a country like Norway, which predominantly uses renewable energy sources, would push miners to move to countries like Kazakhstan, where electricity is mainly generated by coal-fired power plants.

The study also demonstrates that this displacement of miners could lead to a net increase in global emissions. According to their calculations, a mining ban in Europe could increase global emissions from the Bitcoin blockchain by several percentage points, as miners would shift to regions with less stringent ecological regulations. In contrast, a ban in a country like Kazakhstan, which heavily relies on fossil fuels, could significantly help reduce the carbon emissions associated with the Bitcoin network, with an estimated reduction of 7.63% in annual global emissions.

A disparate impact by region The study’s findings also show that the impact of a ban can vary within the same country depending on the region. In the United States, for example, a mining ban in California, where renewable energy sources are substantial, would have a detrimental impact and push miners to states where the energy mix is less green. On the other hand, a ban in states like Kentucky or Georgia, where dependence on coal is greater, could actually help reduce global emissions from the Bitcoin network, according to Exponential Science’s models.

An evident example is China, where Bitcoin mining was officially banned in 2021. According to the researchers, this ban has indeed pushed some miners to continue their operations clandestinely, particularly in provinces like Xinjiang. However, if all mining activities were to cease in this province, it would result in a reduction of nearly 6.9% of global emissions. The researchers highlight the need for regulation informed by scientific data to prevent overly broad bans from leading to outcomes contrary to climate goals.

In light of the climate emergency, this study by Exponential Science underscores the importance of a nuanced approach in mining regulation policies for Bitcoin. As Nikhil Vadgama, co-founder of Exponential Science, reminds us, “emerging technologies like blockchain are complex systems, and poorly designed bans can lead to butterfly effects with unintended consequences.” For governments, this means that it is not enough to ban energy-intensive activities like mining; it is also crucial to assess the displacement effects and environmental impacts that may arise.

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Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

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