Nearly 80% of Bitcoin Mining Done With Renewable Energy: CoinShares Report

Colin Muller
  • An estimated 77.6% of global bitcoin mining comes from renewable energy
  • Bitcoin mining in China is on the wane, although still makes up slight majority

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.

Israel Bitcoin Association Petitions Banks to Reveal Crypto Policy

Neil Dennis

A number of Israel's bitcoin traders have already filed lawsuits against the country's banks and on Monday traders lodged a formal petition demanding that the financial industry explains its cryptoasset policy.

Israel's banks have barred the country's crypto investors from depositing the returns on their bitcoin and other digital currency investments due to the nation's strict laws on money laundering and the financing of terrorism.

In recent months banks have even blocked investors who are known to trade cryptoassets from opening accounts, according to a report by Israeli business journal Globes.

Central Bank Warning

Israel has seen strong growth in digital currency investment in recent years and in 2014 the Bank of Israel, the nation's central bank, issued a warning - in co-operation with the Tax Authority and several regulatory agencies - about the dangers associated with the use of virtual currency, including fraud and money laundering.

Taking aim directly at financial services providers, the statement said:

As the use of virtual currencies enables their anonymous transfer, in many cases evading the need to use financial institutions that are subject  to an anti-money laundering and terror financing prohibition regime, this is an activity with a high risk co-efficient in terms of money laundering and terror financing. Therefore, financial institutions must take this into account within the framework of their risk management policy.


Israel's top legal authority is well aware a problem exists. In February 2018, the Supreme Court issued a temporary injunction prohibiting a bank from blocking activities in an account held by a company that engaged in bitcoin trading.

The bank, however, countered the Supreme Court's injunction, citing the 2014 Bank of Israel warning regarding the risks of bitcoin trade. The bank alleged that activities exposing the bank to such unlawful acts might "harm its reputation and public trust in the bank".

While the injunction stood, it did not affect the bank's right to examine individual activities in the account, nor did it affect the bank's ability to take steps to minimize risks associated with the business activities of the company.

Freedom of Information

The freedom of information petition filed in the Jerusalem District Court on Monday by the Israel Bitcoin Association demands that commercial banks make public their policies on cryptoassets.

Jonathan Klinger, legal adviser to the Bitcoin Association, told Globes:

Under the Banking (Licensing) Law, it is the duty of a bank to state to the Bank of Israel the policy under which it refuses to conduct transactions. We therefore contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We therefore decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks.


Last week the Tel Aviv District Court received a petition for approval of a 75 million shekel ($21.3 million) class action suit against Bank Hapoalim that alleges the bank refused a customer seeking to deposit money from the sale of digital currencies.