Introduction Although Bitcoin's stature in mainstream finance has grown, its environmental impact remains uncertain. The increasing attention paid to climate risks and carbon emissions 1 has triggered a heated debate about the sources of electricity used to mine Bitcoin. There are widespread estimates of the share of renewable electricity sources in the electricity mix that powers Bitcoin mining (see Supplemental Data Sheet 18), ranging from 39% (according to a survey by the Cambridge Centre for Alternative Finance or CCAF) to over 58% (according to an industry initiative called the Bitcoin Mining Council) and even 73% (according to digital assets service provider Coinshares). Mining is the process of adding new blocks to the Bitcoin blockchain to validate transactions. It involves a process of trial-and-error that resembles a competitive numeric guessing game in which a correct guess completes a block and only the winner obtains rewards in the form of both newly minted Bitcoins and transaction fees. The Bitcoin software automatically adjusts the difficulty of guessing a correct number to maintain a constant time of 10 minutes between the creation of new blocks. In May 2021, approximately 2.9 million specialized hardware devices worldwide competed in this game, generating 160 quintillion guesses per second 2 and consuming approximately gigawatts (GW) of electricity (see Supplemental Data Sheet 10 and 11). In the Spring of 2021, the mining crackdown in China shook up global Bitcoin mining activity. Inner Mongolia became the first Chinese province to cite environmental concerns as justification for banning crypto mining in March Between May and June 2021, crypto mining bans were issued in other Chinese provinces such as Sichuan and Xinjiang, which had historically been hotspots for Bitcoin mining. 4 By the end of June 2021, the crackdown eliminated crypto mining activities within China, which previously hosted the majority of Bitcoin miners. In this commentary, we show that this mining crackdown may have increased the carbon intensity of Bitcoin mining. Based on mining locations and regional carbon emission factors, we found that the carbon intensity of Bitcoin mining may have increased by 17% in August 2021 compared to the 2020 average. This potential increase highlights the need for stakeholders in the crypto industry to accelerate the development of strategies to overcome investors' environmental, social, and governance (ESG) concerns.
