Cambridge Bitcoin Electricity Consumption Index (CBECI) Changes Methodology
The University of Cambridge has adjusted the methodology for calculating the Cambridge Bitcoin Electricity Consumption Index (CBECI) related to mining. This change was necessary to reflect the increase in hashrate and its distribution. CBECI estimates the global electricity consumption generated by Bitcoin mining and provides a map of countries with the highest concentrations of hashrate. The latest figure shows that annual Bitcoin mining consumption is expected to be between 67 and 204 TWh, with the precise estimate at 113.22 TWh. This consumption is higher than the Netherlands but lower than Argentina or Norway. Consumption varies based on the hashrate, market value of Bitcoin, and the efficiency of mining machines.
The Level of Hashrate
Bitcoin mining hashrate recently reached a new all-time high. Despite Bitcoin’s price being lower, energy consumption is close to its highs. Price fluctuations are faster than changes in hashrate and energy consumption. The peak of consumption occurred three months after the price peak, while the hashrate peak occurred almost two years later. Machine efficiency plays a role in hashrate growth even as the value of Bitcoin declines. The hashrate distribution map remains stagnant since January 2022.
The Emissions of the Bitcoin Network
The CBECI also calculates the level of CO2 emissions from Bitcoin mining. Annual estimates range from 2 to 114 MtCO2e, with the precise estimate at 57.37 MtCO2e. Bitcoin mining emissions rank 85th if it were a state, lower than the previous ranking of 31st based on energy consumption. Bitcoin mining’s energy consumption pollutes less on average compared to overall energy consumption due to its reliance on electricity, which can be produced from non-polluting sources. Bitcoin mining emissions account for only 0.12% of the world’s total emissions of 48,928 MtCO2e.
Hot Take
The University of Cambridge’s changes to the CBECI methodology provide valuable insights into the energy consumption, hashrate, and emissions of Bitcoin mining. With the upward trend in consumption and the potential for increased efficiency, it is crucial for the crypto community to prioritize sustainable practices and explore renewable energy options to mitigate environmental impacts. While Bitcoin mining’s emissions may appear relatively small in proportion to total emissions, continual efforts should be made to reduce its carbon footprint and promote responsible mining practices.
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