Gregory Barber cryptocurrency, blockchain and artificial intelligence for WIRED.
Not so fast, county officials said. They named a different culprit: a gigantic coal-fired power plant located halfway through the state. If the dam's energy was used for mining at Bitcoin, they said, the county as a whole would end up using more coal. In Aprilthe leaders asked all future mines to build their own renewable energy.
Missoula County was on the right track, said Christian Stoll, an energy researcher at the Technical University of Munich. In one paper published Wednesday in the newspaper Joule, his team takes a closer look at the energy of mining in bitcoins, depending on the location of the miners and the types of machines that they use. "Coal feeds Bitcoin," he says. "The question is how to avoid it, and it belongs to the local regulators."
The mining of bitcoins, a process called "proof of work", involves a global network of concurrent machines to solve complex mathematical problems. In return for securing the network, the solver receives bitcoins. When it comes to measuring energy consumption, the overall nature of this activity makes studies difficult. It is unclear what types of machines are operating, where they are located and which fuel has been used to power the electricity.
These unknowns have led to extremely variable estimates. A study says that the growth of bitcoin extraction alone could lead to an increase of 2 degrees Celsius in global temperatures. But others say that such estimates are exaggerated as miners flock more and more to cheap sources of renewable energy, such as hydroelectricity.
The Stoll team was able to take on a more granular appearance thanks to a time lapse. Last year, three Chinese mining equipment manufacturers, responsible for the production of almost all the machines in the world, filed their first public offer. During the process, they unveiled a wealth of technical details and market share data that are generally kept secret. By browsing through these documents, researchers could learn about the type of equipment used and its location.
Another benefit: Bitcoin is not as decentralized as it seems. The era of anonymous extraction of bitcoin on your personal computer is over. Today, the network is dominated by a handful of "pools" that coordinate their efforts. By identifying the IP addresses of the pools' servers and devices, the team discovered that it could develop a rough geographic footprint of bitcoin mining.
Taking into account factors such as the size of the mining facilities (the larger ones can be further cooled) and the average emissions in popular areas for the mining industry, the Stoll team estimated the Bitcoin CO2 emissions of about 22 megatonnes a year. This places it somewhere between the annual emissions of Jordan and Sri Lanka. Or, to put it another way, it's basically the carbon footprint of Kansas City Metropolitan Area. (Yes, that should tell you that we use a lot of energy in this country.) It's on the conservative side of other, more alarming estimates. If we take into account other cryptographic pieces that use similar work proof algorithms (Ethereum, Monero, zCash, etc.), the emissions figure could almost double, Stoll explains.
Not everyone agrees with this conclusion. In separate the report Published this week, Christopher Bendiksen of CoinShares, a blockchain industry research group, says that most estimates tend to underestimate the role of renewable energy in the exploitation of bitcoin . It has to do with centralization, he says. Like data centers run by large, high-tech companies, bitcoin miners have the means to choose where to build the best energy, which is often renewable. Miners have flocked to be near dams in places like the Pacific Northwest and the upstate of New York State, as well as hydrothermal power plants in Iceland. CoinShares estimates that about 74% of bitcoin mining is generated by renewable energies.
The WIRED guide for Bitcoin
The main source of disagreement? "China is the key here," said Stoll. The Chinese dilemma is a bit like Missoula, but on a much more massive scale. While China is responsible for the majority of mining activities, it is divided into two different worlds, energy. In southern China, particularly in the mountains of Sichuan Province, miners exploit cheap and abundant hydropower. The other Mecca of the Chinese mining industry is Inner Mongolia, which runs on coal. CoinShares estimates that 80 percent of China's mining activity takes place in the wider Sichuan region. But based on interviews with miners and IP data from the largest Chinese mining pool, Stoll came in at a lower figure – about 58%.
There is also a question of greenness of Sichuan itself. The economist Alex de Vries, who follows the energy of Bitcoin on his blog, Digiconomiste, underlines the unpredictability of hydroelectric power in Sichuan, which relies on seasonal rains. When the price of bitcoin is high enough, the farm remains profitable even during the dry season. It means more CO2De Vries says that because Sichuan no longer has hydropower, it uses more dirty fuels, such as coal.
Whatever the exact numbers, Stoll notes that even his estimate does not suggest that Bitcoin burns the planet for the moment. But he says that emissions need to be kept in mind when people are considering adopting the blockchain – and its energy-inefficient security processes – more broadly. This is particularly true for local regulators in key mining areas, he says, who need to consider the local dynamics of their electricity market when new mines move on-site, such as in Missoula, for example. .
However, many people want to think about Bitcoin. Outside of Missoula, a few places are trying. Other popular local for miners such as Oregon and upstate New York have attempted to solve the problem by raising electricity rates for the operations of cryptocurrency. In April, China itself proposed to ban the mining of bitcoins. Why The country had judged that it was useless.
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