BITCOIN AND CARBON

One of the worst of Bitcoin and its derivatives is the fact that China has dominated the digital coin mining for several years. Some 75% of the world’s bitcoin mining is done in China. One of the main reasons is that banks in China are indifferent as to the sourced of the revenue.

Since 2017, the Chinese government has imposed many regulations that have made life difficult for miners of bitcoin and other cryptocurrencies. But they soldier on, and look set to prosper. Inner Mongolia has banned digital coins outright.

Most of the power in China is derived from Coal as the nation does not have much natural gas or oil reserves. Imported natural gas from Russia is generally has afforded China some options.

China’s shale gas resource is the world’s largest, however much of the shale gas is very deep, in mountainous areas and challenging to produce. Shale gas production in 2018 was roughly 10 bcm, mostly from Sinopec’s Fuling field in Chongqing and CNPC’s Changning-Weiyuan field in Sichuan.

Converting coal-fired furnaces and boilers to natural gas is a high priority of the Chinese government. Tools for achieving that goal include financial support for conversions, regulatory requirements and directives to state-owned companies.

Across much of northern China, a massive conversion of heating infrastructure from coal to natural gas is currently underway. Seven million households were connected to the natural gas grid in 2017 and 2018. Industrial boilers, district heating networks and building furnaces are being converted. These conversions have helped cut air pollution, although at times they have run ahead of natural gas supply infrastructure.

Given the high power requirements for digital coins generally, the who sector is far from a green industry. In areas where coal is used can be very polluting as many areas do not have regulations to protect the environment. The smog from coal is well known.

Global warming is causing all kinds of problems. North America has seen a sharp increase in forest fires. Tropical and subtropical areas are experiencing worse hurricane and typhoons every year. Coral reefs are dying everywhere. The is all driven by carbon pollution.

The EU and the US are taking a more active role in regulating the digital coin market. The reason is due to the manifest problems posted here over the last 5 years.