UCL Centre for Blockchain Technologies (CBT)’s Post

Can Bitcoin mining bans backfire? How bad can it be? I'm proud to share the good news that our latest discussion paper is out. The paper starts with a premise: In the Bitcoin network, incentives mean that if a jurisdiction bans mining, mining will not cease to exist but relocate to other jurisdictions. Thus, if miners move to a more carbon-intensive jurisdiction, the global carbon footprint of the network will rise, not fall. Effectively, this is what we know as "carbon leakage". To estimate this effect, we need to model many factors. Most importantly, we need to know where miners are. This is really hard to know because there is no public map of miner locations. To address this, my co-authors Aayush Ladda, Paolo Tasca and Logan Aldred (a mix from DLT Science Foundation, Exponential Science, UCL Centre for Blockchain Technologies (CBT)) and I made a huge data collection effort to build an up-to-date map of the Bitcoin hash rate. Using Nodiens data, we build on the principles of models such as CBECI (Cambridge Centre for Alternative Finance, Cambridge Judge Business School), and learn from the improvements suggested by DA-RI/Daniel Batten's BEEST. We don't rely on mere on-grid carbon intensities but identified the energy sources used on-grid and off-grid with monthly granularity, considering both point-of-generation emissions and life-cycle emissions. The result confirms the intuition (perhaps obvious to some, but still crucial to quantify): Bitcoin mining bans may backfire, increasing global emissions contrary to intentions. This underscores the need for nuanced policy approaches. It's interesting to note the magnitude of this potential effect in countries like Paraguay and Canada! The paper can be found within the Exponential Science Discussion Paper Series at https://lnkd.in/dVCjm_8k Simon Collins Troy Cross Horst Treiblmaier Bradford van Voorhees Elliot David אליוט דוד 邓宏远 Alexander Freier Francesco Redaelli Vivek Chand Lukas Pfeiffer Gideon O. Powell 🏴☠️ Pierre R. Margot Paez Dennis Porter Jiahua Xu