Cambridge Updates Bitcoin Mining Index to Reveal True Power Consumption

Cambridge has recently updated its Bitcoin Mining Index to provide accurate and reliable data regarding the power consumption of Bitcoin mining activities. The new update aims to offer a clearer understanding of the energy usage associated with Bitcoin mining, a crucial factor considering the environmental concerns surrounding cryptocurrency. With this improved index, users can access comprehensive and SEO-friendly information about the true power consumption of Bitcoin mining operations.

The University of Cambridge Updates Bitcoin Electricity Consumption Index
New Estimate Shows Lower Energy Footprint for Bitcoin Mining

After three years, the University of Cambridge has implemented a major update to its Bitcoin Electricity Consumption Index (CBECI) to more accurately assess the global energy footprint of Bitcoin miners. The previous power estimates were greatly overestimated, with the revised model estimate showing a lower electricity consumption of 89.0 TWh in 2021, compared to the previous estimate of 104 TWh.

The need for the revision arose from the university’s former methodology that assumed every “profitable” hardware model equally fueled the network hashrate. However, this methodology started exhibiting shortcomings in 2021 after China’s mining ban, as it overestimated the number of older hardware and underestimated the proportion of newer hardware. Therefore, the university adjusted its 2022 power estimate down by 9.8 TWh to 95.5 TWh.

The updated figures from the University of Cambridge reinforce findings from a Coin Metrics study, which used blockchain-based fingerprints left behind by mining machines to determine dominant hardware in the network. However, Karim Helmy, lead author of the Coin Metrics report, believes that Cambridge’s figures are still inaccurate as they overestimate energy consumption in bull markets and estimate a considerable increase in energy consumption per terahash between 2020 and 2021.

Despite the imperfections, the Cambridge model takes public company hardware data into account and provides a more precise assessment of Bitcoin’s electricity consumption. The university estimates that the Bitcoin network has consumed 70.4 TWh of energy so far in 2023.

Cambridge Model: Good, but Not Perfect

Cambridge’s updated methodology incorporates recent hardware mining deliveries, addressing the shortcomings of the previous model. However, the new approach still includes assumptions and simplifications, leading to potential inaccuracies in energy consumption estimation during exceptionally profitable mining periods.

While the Cambridge model is an improvement, it is important to consider other perspectives. CH4 Capital founder Daniel Batten supports the findings of the Cambridge model but offers his own estimate of Bitcoin’s current power demand. Batten’s model puts Bitcoin’s power demand at 13.095 GW, slightly higher than Cambridge’s estimate of 12.89 GW.

Overall, the University of Cambridge’s updated Bitcoin Electricity Consumption Index provides valuable insights into the energy footprint of Bitcoin mining. However, it remains a dynamic field, and further refinements are necessary to capture the nuances of energy consumption in different market conditions.

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