Bitcoin

Chinese court rules bitcoin mining harms the climate

A Chinese court annulled a cryptocurrency mining contract on the grounds that the emissions it generates accelerate climate change.

Last week’s ruling shows that judges in China are beginning to make a link between national carbon targets and energy-intensive activities.

Reading: China bitcoin september april united statesjudge

The case relates to a dispute between a company that hired another to buy and operate cryptocurrency mining machines, but did not get all the bitcoins they thought they paid for. the first company sued. His claim was rejected by a court that considered the mining agreement itself invalid because it harmed the public interest.

On July 11, the Beijing Third Intermediate People’s Court upheld the verdict, ruling that cryptocurrency mining threatens national economic security and social order. This is consistent with a decision by the People’s Bank of China last September to ban all cryptocurrency transactions, citing its role in facilitating financial crime and growing risks to the country’s economy.

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The court added that cryptocurrency mining wastes energy resources in a way that is inconsistent with China’s path to carbon neutrality. “Judging by the high energy consumption of ‘mining’ and the impact of bitcoin business activities on the financial and social order of the country, the contract in question should be invalid,” he ruled.

Mining cryptocurrencies like bitcoin consumes a lot of energy. a study published in nature communications last year found that around 40% of china’s bitcoin mines are coal-fired, while the rest use renewable energy. With Chinese mines generating nearly four-fifths of global cryptocurrency trade, the study concluded that the industry risks undermining China’s climate goals and broader global action.

Experts said that the latest court ruling is mainly about enforcing the ban on cryptocurrency activities as covert mining is on the rise again. but growing environmental and energy security concerns among the public do have a role to play.

With restrictions on activism and broader public debate, litigation has proven a powerful avenue for prosecutors and NGOs to enforce environmental measures.

Climate change lawsuits are just beginning to emerge, in part because China lacks national climate legislation. But following President Xi Jinping’s pledge to cap national emissions by 2030 and achieve climate neutrality by 2060, courts are starting to consider non-legal policy documents or statements by leaders in cases before them.

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dancing aficionado, climate lawyer and financier of clientearth china, said that in the absence of a national climate law, the latest ruling was the first time an end-effect ruling explicitly mentions carbon neutrality and peak carbon targets of China and “determines a commercial contract will be void due to the high energy consumption of the bitcoin mining process, among other reasons, and parts required to promote sustainable development.”

pointed out that zhou qiang, president of the people’s supreme court, has encouraged judges to understand the climate implications of the cases before them. “This is the first example that we know of where the judge became aware of this.”

It is not clear how the decision will affect the Chinese cryptocurrency market. alex de vries, data scientist at de nederlandsche bank, researcher at vrije universiteit amsterdam and the man behind digiconomist, said that because miners have scaled back their operations to go unnoticed, it’s hard for authorities to weed them all out.

Bitcoin price fell from an all-time high of over $65,000 in November 2021 to $18,000 in June, dramatically reducing margins for miners. but de vries said that, under the right conditions, mining can still be very profitable.

“The price drop hit older and less efficient mining operations hard, but those operating on very cheap electricity and the most modern mining devices can still make a lot of money,” he said. “It really depends on what machines you have, how efficiently you can cool them, and how much you pay for electricity.”

See also: Niños ganan 113 millones de pesos gracias a las criptomonedas – Gente – Cultura – ELTIEMPO.COM

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