A major study claims that bitcoin mining is 52% green. We are far from the oft-cited figures from Cambridge University.
Off-grid bitcoin mining
So far we have done two major studies on Bitcoin energy consumption. Those are the Cambridge Center for Alternative Finance (CCAF) and the Bitcoin Mining Council (BMC).
The first estimates that the share of renewable energy in the mix of bitcoin miners is 37.6%. The amount of BMC is 59.4%.
The BMC study is based on figures provided by North American miners which represent 46% of the hashrate. The remaining 54% is a simple extrapolation of the US energy mix.
There is also the Digiconomist site. Alex de Vries, an employee of the Dutch central bank, is the second … Unfortunately, his unreliable figures are too often picked up by Bloomberg, The Guardian, the NY Times, etc.
Faced with the wide variation in the figures, this third study by Daniel Batten is welcome.
Especially since unlike the CCAF, D. Batten also takes minors into account “off grid”. That is to say those “own their own power station or have entered into a contractual agreement with an energy company”.
This addition is a game changer since 52.8% of mining is done off the web! And even more so since off-grid energy is mostly carbon-free (65.5%).
This new information suggests that Bitcoin:
- It uses at least 52.2% renewable energy.
- It increases its share of renewable energy by 4.50% every year.
The 4.5% projection is based on ongoing mining projects and the fact that the global energy mix is greening by an average of 0.7% per year.
Conversely, incomplete estimates from Cambridge suggest that Bitcoin would use only 37.6% renewable energy.
Here is a summary of the report in graphics:
It should be noted that the miners using coal are not installed directly on coal power plants. Coal is the main source of electricity worldwide (36.7%).
One of the bad guys is Stronghold. The miner uses 165 MW of carbon energy. Or about 2.3% of the hashrate.
On the other end of the spectrum, we have 17 miners (16% of the hashrate) that use 100% or almost renewable energy:
These estimates are not yet perfect. In particular, there is a lack of information about Kazakhstan, where many miners run on anthracite. China’s share of mining is also unclear.
According to the CCAF, China still accounted for 21% of the hashrate in January 2022. In this report, Daniel Batten assumed that hydro only accounts for 1/3 of the Chinese miner mix.
It should also be noted that this study does not take into account the mitigation of greenhouse effects when the miners are connected to methane flares. Or 2.36% of the hashrate.
The reason is that electricity is obtained by burning methane (which escapes from flares) to CO2. However, the greenhouse effect of CO2 is much less significant than that of methane.
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Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.