A major study claims that bitcoin mining is 52% green. We are far from the often quoted figures from the University of Cambridge.
Off-grid bitcoin mining
So far we have had two major studies on the energy consumption of Bitcoin. Those of the Cambridge Center for Alternative Finance (CCAF) and the Bitcoin Mining Council (BMC).
The first one valued that the share of renewable energy in the mix of bitcoin miners is 37.6%. That of the BMC is rather 59.4%.
The BMC study is based on figures provided by North American miners who represent 46% of the hashrate. The remaining 54% is a simple extrapolation of the US energy mix.
There is also the Digiconomist site. The latter is held by Alex de Vries, an employee of the central bank of the Netherlands… His unreliable figures are unfortunately still too often picked up by Bloomberg, The Guardian, the NY Times, etc.
Faced with the great disparity in figures, this third study directed by Daniel Batten is therefore welcome.
Especially since unlike the CCAF, D. Batten also takes into account the minors installed “off-grid”. That is to say those “who own their own power plant or who have entered into a contractual agreement with an energy company”.
This addition is a game-changer since 52.8% of mining is done off-net! And all the more so since off-grid energy happens to be mostly carbon-free (65.5%).
A size difference
This new information suggests that Bitcoin:
- Uses a minimum of 52.2% renewable energy.
- Increases its share of renewable energy by 4.50% each year.
The 4.5% projection is based on ongoing mining projects and the fact that the global energy mix is greening by 0.7% per year on average.
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 who use coal are not installed directly on coal-fired power plants. Coal is simply the main source of electricity worldwide (36.7%).
One of the bad students is Stronghold. The miner uses 165 MW of carbon energy. Or about 2.3% of the hashrate.
On the other side of the spectrum, we have 17 miners (16% of the hashrate) that use 100% or nearly renewable energy:
These estimates are not yet perfect. In particular, there is a lack of information about Kazakhstan, where many miners run on anthracite. The share of Chinese 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 hydroelectricity accounts for only 1/3 in the mix of Chinese miners.
It should also be noted that this study does not take into account the attenuation of the greenhouse effect when the miners are connected to methane flares. Or 2.36% of the hashrate.
The reason being that electricity is obtained by burning methane (which escapes from flares) into CO2. However, the greenhouse effect of CO2 is much less significant than that of methane.
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