The latest Bitcoin Energy Consumption Index from Digiconomist suggests that estimates may well be short of the actual power usage of the global mining network.
Data from the research group was released earlier this week and reflects an interesting year for the Bitcoin mining ecosystems power consumption.
As the graph below from Digiconomist shows, the energy usage of the Bitcoin mining ecosystem has had periods of growth and significant drop offs for varying reasons. The biggest drop in power consumption was as a result of the Bitcoin mining reward halving which forced miners that could not operate profitably to shut off their equipment.
Nevertheless the Bitcoin network’s energy consumption has been steadily growing since May 2020. According to the estimates from Digiconomist, the Bitcoin network uses around 68 TwH of energy which is comparable to the power consumption of the Czech Republic. When placed on the list of power consumption by country, Bitcoin is 43rd on the list of different countries’ power usage.
The carbon footprint of this energy consumption is estimated to be over 32 metric tons of CO2 emissions which is about par with that of Azerbaijan.
Digiconomist also provides estimates for the electricity usage to verify a single Bitcoin transaction, which it equates to the equivalent power usage of an average United States household over 20 days, at 599.51 kWh.
Are estimates reliable?
The Digiconomist resource also cites research from 2019 that suggests that the Bitcoin network has a large portion of miners using electricity produced by coal power plants. As Wired reported last year, the Technical University of Munich report led by energy researcher Christian Stoll made the claims by undertaking a deep dive of miners locations around the world.
This however has been challenged by a 2019 report from blockchain research and advisory firm Coinshares which estimated that nearly 70 percent of the Bitcoin mining ecosystem runs on renewable energy.
These somewhat conflicting accounts are still only estimates although researchers have done their utmost to give accurate data and insights into the Bitcoin mining ecosystem’s power consumption.
Another report from Digiconomist published in August 2020 suggests that the Bitcoin mining network’s power consumption is likely to be underestimated as well.
Another interesting point brought up by Digiconomist is that its data and insights on the energy consumption of the Bitcoin network is markedly similar to the Cambridge Bitcoin Electricity Consumption Index – which does suggest that the general numbers and estimates do provide important insights into the space.