Gita Gopinath, Deputy Managing Director of the International Monetary Fund, expressed concern over the increasing energy consumption and carbon footprint of cryptocurrency mining and AI data centers, expected to worsen in the next few years.
What Happened: In an X post on Sunday, Gopinath stated, citing IMF data, that the share of cryptocurrency mining and data centers in global electricity could rise to 3.5% by 2027 in a base case scenario, from 2% in 2022. This would equate to the current consumption of Japan, the world’s fifth-largest electricity user.
In the high-case scenario, the share could expand to nearly 6%, while the low-case scenario would see a slight increase to 2.2%.
Interestingly, cryptocurrency mining activity’s share in global CO₂ emissions was projected to decline in 2027, primarily driven by the reduction in mining rewards due to halving. However, data centers’ carbon emissions could reach 450 million tons by 2027, or 1.2% of the world’s total.
Why It Matters: Gopinath’s concerns come amid the ongoing debate around Bitcoin BTC/USD mining's environmental impact
According to the Cambridge Bitcoin Electricity Consumption Index, the annual greenhouse emissions from Bitcoin mining were higher than in countries like Greece and North Korea.
However, the increasing footprint hasn’t deterred nations from exploring the economic prospects associated with the still-nascent business.
President-elect Donald Trump vowed to make the U.S. the Bitcoin mining hub of the world during his election campaign, while Vladimir Putin’s Russia legalized cryptocurrency mining earlier this year.
Photo by CMP_NZ on Shutterstock
Photo Courtesy: Shutterstock.com
Read Next:
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
