One of the key takeaways from Cambridge University’s latest Cryptoasset Benchmark Study is the global proof-of-work mining ecosystem’s usage of renewable energy.
The paper is the University’s third annual report into the state of the global cryptocurrency space and delivers a number of insights into the biggest talking points in the industry.
2020’s paper provides a gauge of the global cryptocurrency mining industry and delivers some key insights into the state of PoW mining. The section starts off by suggesting that the role of PoW miners is ‘overlooked and underappreciated’ and intends to unpack the complexity of the ecosystem.
Bitcoin most popular to mine
The research paper highlights data that suggests that the choice of token being mined by PoW miners is primarily driven by the cost of the energy source being used by a given participant.
The data suggests that larger hashers from the Asia Pacific region (APAC) and North America have better access to stable energy sources. Smaller miners’ choice of cryptocurrency to mine is more heavily driven by the cost of energy.
Nevertheless Bitcoin is still the most preferred cryptocurrency to mine by PoW hashers that participated in the study. 89% of those participants indicated that they mined BTC, followed by 35% mining Ethereum and 30% mining Bitcoin Cash.
The popularity of Bitcoin also seems to transcend borders as it is the preferred token to mine across all regions surveyed by researchers. The data shows that Ethereum is popular to mine in Latin America, while Bitcoin Cash is preferred in APAC and North America.
On the privacy coin front, a larger percentage of PoW miners in Western countries also indicated that they mine ZCash while North American miners reportedly mined Monero as well.
What it costs
Another interesting take away from the report is the difference in the cost breakdown of running a PoW mining operation in different regions around the world.
There is a clear difference between the percentage cost breakdown of hashers per region in four categories, namely capital equipment, utilities, maintenance, employee costs.
Given that a large amount of ASIC miners are manufactured in China means that local hashers have far easier and less costly access to hardware. Therefore just 37% of Asia Pacific hashers’ mining cost breakdown goes to capital equipment, in contrast to North American hashers’ 52% going to capital equipment.
Source: 3rd Global Cryptoasset Benchmarking Study
PoW energy consumption
The 3rd Global Cryptoasset Benchmarking Study notes that the environmental impact of PoW mining is ‘still typically misrepresented in most sources’ in both positive and negative perceptions.
Nevertheless the 2020 survey data shows that 76% of hashers use renewable energy as part of their energy source breakdown.
It is important to note that the actual share of renewable energy in hashers’ total energy consumption sits at 39%. Hydropower accounts for the most used renewable energy, with 62% of participants indicating their usage of hydroelectric power.
Coal and natural gas powered operations ranked second and third most used energy sources.
Similar to 2018, this year’s survey data shows that a significant majority of hashers (76%) use renewable energies as part of their energy mix (Figure 15). However, the share of renewables in hashers’ total energy consumption remains at 39%. Hydropower is listed as the number one source of energy, with 62% of surveyed hashers indicating that their mining operations are powered by hydroelectric energy (Figure 16). Other types of clean energies (e.g. wind and solar) rank further down, behind coal and natural gas, which respectively account for 38% and 36% of respondents’ power sources.
