In recent years, Bitcoin’s energy usage has been under intense scrutiny due to the energy-intensive nature of validating transactions on proof-of work networks. However, a report released by crypto intelligence firm Coin Metrics aims to bring a fresh perspective to this contentious debate by examining the energy consumption of Bitcoin miners by analyzing the blockchain.
The report builds on the methodologies of studies conducted by other institutions and serves as a reference value for how competitive miners’ machines are. By analyzing the data from miners’ constant stream of guesses, researchers claim they can deduce Bitcoin’s overall electricity consumption with greater accuracy. The study explored 11 different ASICs (Application Specific Integrated Circuits) across four manufacturers, focusing on models released between 2016 and last year.
Factoring hardware efficiency into the equation has produced lower estimates for Bitcoin’s power consumption compared to other studies that lacked ASIC-level data. For instance, Coin Metrics’ estimate for miners’ power consumption in May is 16% lower than the University of Cambridge’s Bitcoin Energy Consumption Index, which is considered the industry’s gold standard.
While Coin Metrics commends the work done by Cambridge researchers, they argue that their model is more accurate. The report also provides data for miners to assess how their rigs compare in terms of efficiency with other miners. Monitoring the dominance of hardware manufacturers can help identify potential points of centralization, providing valuable input from a security standpoint.
Additionally, the report includes estimates for e-waste, accounting for how often each ASIC needs to be replaced. This aspect has been relatively overlooked but is becoming increasingly relevant as concerns grow over the environmental impact of crypto mining.
The development of this new method by Coin Metrics opens the door to more robust, data-driven discussions surrounding Bitcoin’s energy use. The debate is far from settled, but advancements like this can help provide a greater nuance and understanding, allowing for more informed decisions to be made regarding the future of cryptocurrencies and their impact on the environment.
Source: Decrypt
