The vast majority of bitcoin mining is probably conducted using renewable energy sources, CoinShares have calculated in a scathing rebuke to critics who have alleged that bitcoin mining operations are environmentally wasteful.

CoinShares is a UK-based cryptoasset research and investment firm, who have offered cryptoasset exchange traded products since 2015 on the Stockholm NASDAQ/OMX exchange.

The report used a combination of publically available numerical data, media reports, “insight from industry insiders” and some best-guess assumptions to propose that 77.6% of worldwide bitcoin mining is conducted from renewable energy sources.

CoinShares singled out in particular a recent Nature article, which garnered widespread attention, even in traditional media, for proposing that bitcoin mining alone could propel the world past the anti-pollution limits set down during the 2015 Paris Agreement – CoinShares called the article “groundless.”

Nature Got It Wrong

The rebuked article, authored by Camilo Mora of University of Hawaii’s Department of Geography and Environment, calculated an approximate carbon emission footprint – to greatly oversimplify – by multiplying bitcoin’s 2017 estimated energy consumption based on standard mining equipment efficiency, and the average CO2 emission rates associated with power production of countries from which mined blocks were thought to have been mined.

It was from this methodology that Mora et al issued their stark warning, but CoinShares introduced a subtle but apparently crucial element of complexity into that basically good analysis by looking at the sub-country situation of power production, down into regional economic and political considerations.

“By multiplying the electricity consumption of every block in 2017 by the electricity emissions in the country where the proof-of-work was likely to be resolved, we were able to estimate the total CO2e emissions for computing every block in 2017.” – Camilo Mora, Nature

While observing that mining operations are leaving once-dominant China in significant numbers, due to a “combination of cheap abundant electricity, friendlier regulation, fast internet connections and, to a lesser degree, cooler climates” elsewhere, much of CoinShares’ analysis still focused on a fine-grained understanding of the mining ecosystem in China, where they say at most 60% of mining is undertaken.

A key observation made is that the vast majority of bitcoin mining in China occurs in regions enacting policies of so-called “curtailment.”


In the past few years, China has gone on a bonanza of renewable energy investment, even becoming the highest-producing nation of solar energy last year. This has led to a glut of power that some regional power grids can’t handle, and which have had to be artificially throttled as a result.

Bloomberg has only yesterday reported on this issue, saying “The world’s biggest clean energy investor [i.e., the Chinese government] has had to slow the introduction of renewable power because some grids were not capable of handling big increases.”

Bitcoin mining in China has gravitated to these regions of curtailment, scooping up cheap electricity costs in areas of oversupply and low population, which have come to rely on government subsidies rather than demand.

The upshot of all of this is that, in CoinShares’ estimation, a shocking 95% of Chinese mining occurs using renewable energy, with 80% of total Chinese mining (or 48% of global mining) occurring in just one province: Sichuan.

Outside China, the ratio does not change much. Most of the hotspots of non-Chinese mining – typically cold places like Iceland, Georgia, or the Northwestern US – have very high incidence of renewable energy usage, with Russia being the most glaring exception at only 17% according to CoinShares’ data.

It bears mentioning that this general argument, although perhaps most dutifully elaborated by CoinShares, has been made before – most notably by the crypto-evangelist Andreas Antonopoulos. The price of bitcoin had a brief respite today, showing strength and climbing back above the $4,000 mark for the second time in a few days.