Story at a glance
- Sixty-five percent of the world’s bitcoin is mined in China.
- China largely relies on coal-powered energy, causing carbon emission concerns over purchasing bitcoin mined in the country.
- Mining bitcoin utilizes an amount of energy equal to Argentina’s annual carbon footprint.
As a growing number of large corporations and big-time investors have come to invest in the cryptocurrency bitcoin, a line has increasingly been drawn when it comes to how and what kinds of bitcoin they will acquire.
Most recently, investor Kevin O’Leary of “Shark Tank” fame has said he will only buy bitcoin that has been mined with clean energy.
“I see over the next year or two, two kinds of coin,” he said during an appearance on CNBC’s “Capital Connection” on Monday. “Blood coin from China, [and] clean coin mined sustainably in countries that use hydroelectricity, not coal.”
The process of mining bitcoin, in which complex math algorithms must be solved to create and award new bitcoin, is highly energy-intensive.
As interest in bitcoin has risen, so has the amount of energy needed to create it. According to the Cambridge Bitcoin Electricity Consumption Index, the energy utilized to mine bitcoin has hit the equivalent of Argentina’s annual carbon footprint.
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O’Leary said he aims to only purchase bitcoin that has been mined sustainably, which typically involves the use of hydroelectricity in areas such as Sweden or Norway.
However, as of April 2020 about 65 percent of bitcoin was mined in China, which largely burns coal for electricity, according to Statista.
“All these issues … have now come to the fore on bitcoin,” O’Leary said. “Institutions will not buy coin mined in China, coin mined using coal to burn for electricity, coin mined in countries with sanctions on them.”
Compounding these issues with sustainable energy are recent sanctions and public outcry against China for human rights violations.
Among top human rights concerns lie with accusations that the Chinese government has repressed Uyghur Muslims through “severe restrictions on religious freedoms, the use of forced labor, mass detention in internment camps, forced sterilizations, and the concerted destruction of Uyghur heritage,” a joint statement from the United States, the United Kingdom, Canada, Australia, and New Zealand said.
The European Union has also declared sanctions against China in response.
“I’m not buying coin unless I know where it was mined, when it was mined, the provenance of it,” O’Leary said. “Not in China. No blood coin for me.”
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