China’s crackdown on cryptocurrencies upended the world of Bitcoin last year, triggering a mass exodus of “miners” – who use power-hungry computers to mine, or create, new Bitcoins – to new locations around the world.

Now research has found that the exodus probably made crypto mining, which already uses more electricity than many countries, even worse for the climate. According to the peer-reviewed study, which appears in the journal Joule, the Bitcoin network’s use of renewable energy sources such as wind, solar or hydropower dropped from an average of 42 per cent in 2020 to 25 per cent in August.

One likely reason: Bitcoin miners lost their access to hydropower from regions within China that had powered their computers with cheap, plentiful, renewable energy during the wet summer months. Instead, a substantial number of miners migrated to nearby Kazakhstan as well as further afield to the United States.

In those countries, miners have been using more fossil fuels, mainly coal in Kazakhstan and natural gas in America. Coal and natural gas are both drivers of climate change because burning fossil fuels pumps vast amounts of planet-warming carbon dioxide into the atmosphere.

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The researchers – from Vrije Universiteit Amsterdam, Technical University of Munich, ETH Zurich and the Massachusetts Institute of Technology – estimated that Bitcoin mining may be responsible for about 65 megatons of carbon dioxide a year, comparable with the emissions of Greece. “It’s bad news for Bitcoin owners because their holdings just got more dirty,” said Alex de Vries, co-author of the paper.

“There was a lot of optimism that China banning Bitcoin mining would make mining more green,” de Vries said. “But the fact is, it was already a dirty business, and it just got worse.”

The latest research adds to the debate about Bitcoin mining’s environmental effects at a time when the cryptocurrency’s standing in mainstream finance has grown. Mining for Bitcoin, in particular, has come under scrutiny because it is designed to become more difficult as more miners participate, making mining each Bitcoin more energy-intensive. (Ethereum, another cryptocurrency, is working on an alternative method that would use far less energy.)

There have been widely varying past estimates of the share of renewable energy sources that Bitcoin miners use. A survey by the Cambridge Centre for Alternative Finance put the global average of renewables used in mining at around 40 per cent. The Bitcoin Mining Council, an industry group, has said the number was closer to 60 per cent. And Coinshares, a digital-asset investment firm, has estimated that as much as 73 per cent of the electricity Bitcoin miners use is powered by renewables.