Cambridge University Launches Bitcoin Network Energy Consumption Index

The Cambridge Centre for Alternative Finance, part of the Cambridge Judge Business School, has just launched a new Bitcoin energy consumption index. Updating every 30 seconds, the Cambridge Bitcoin Energy Consumption Index (CBECI) provides up-to-date data detailing how much electricity it takes to power the Bitcoin network. On the landing page of the website, as well as an average network consumption estimate, there is an upper and lower bound estimate of Bitcoin energy use. Each estimate is expressed as both the total electrical power consumed (expressed in gigawatts), as well as the total yearly power requirements of the network (in terawatt-hours). At the time of writing, the lower, average, and upper values for the total power consumed are 2.7, 7.32, and 22.1 GW respectively. The index claims that BTC consumes 0.24% of the worlds total electricity needs and 0.21% of the world’s total energy production. The upper bound estimates each assume that the most inefficient mining units are being used by the entire network. Meanwhile, the lower bound estimates assume that only the most energy-efficient hardware currently comprises 100% of all Bitcoin mining output. Finally, the average assumes that every miner uses a basket of equipment with varying efficiency ratings. On the selection of miners used to work out these figures. the site’s methodology page states:

“We have compiled a list of more than 60 different Bitcoin ASIC models designed for SHA-256 operations that have been brought to market since October 2014, which serves as the starting date of the CBECI.”

The landing page also features interesting charts documenting the network’s energy consumption over time, which is rising in line with recent price moves. Elsewhere on the resource, visitors will find comparisons between the Bitcoin network and other big electricity users. Along with the typical “Bitcoin versus [Specific Country]” comparisons, one such example puts “always-on but inactive home devices in the USA” against the Bitcoin network. The CBECI finds that devices on standby in the United States alone could power the Bitcoin network for an impressive four years. Although it may well be the most accurate and up-to-date measure of the Bitcoin network’s energy consumption to date, those behind the CBECI do recognize some limitations with the methodology used. Among these are its strong reliance on electricity cost estimates; the difficulty in staying up-to-date with hardware advances; and ignorance of other cost factors (including cooling and maintenance). Do you think proof-of-work crypto assets like Bitcoin use too much energy? Do you think the consumption is worth it for network security? Let’s hear your thoughts below.  Also, if you are interested in buying, selling, or trading bitcoin on our partner exchange, follow this link to get set up on XCOEX!