The Cambridge Centre for Alternative Finance launches a new real-time index tracking the total electricity consumption of the Bitcoin network.
The Cambridge Centre for Alternative Finance (CCAF), an academic research centre at Cambridge Judge Business School, University of Cambridge, today launched the CBECI. The index provides a real-time estimate of the total annual electricity usage of the Bitcoin network and enables live comparisons with alternative electricity uses in order to put numbers into perspective.
The index has been developed in response to growing concerns over the sustainability and environmental impact of Bitcoin mining, which relies on computation-heavy cryptographic operations that require significant amounts of electricity. Reliable estimates of Bitcoin’s electricity usage are rare: in most cases, they only provide a one-time snapshot and the numbers often show substantial discrepancies from one model to another.
The CBECI provides a neutral and objective platform for reliable information on Bitcoin’s electricity consumption for use by policymakers, regulators, researchers, the media and others.
The website features a comparison section to help visitors independently assess the relative magnitude of Bitcoin’s electricity usage: for example, the current annual estimate of 50 terawatt-hours (TWh) could power all European tea kettles used to boil water for a year, or satisfy the energy needs of the University of Cambridge for 365 years. Looked at from a different perspective, the electricity wasted each year by always-on but inactive home devices in the United States alone could power the Bitcoin network more than four times.
The underlying model is based on a bottom-up methodology based on a variety of factors including the energy efficiency and economic lifetime of more than 60 different mining hardware machines. The model is reviewed and transparently updated on an ongoing basis. The CBECI is a collaborative project that is open to feedback, suggestions, and constructive criticism: interested stakeholders are therefore invited to contribute to the project and help refine the analysis.
The CBECI is designed as a first step toward a more comprehensive analysis of the environmental footprint of the cryptocurrency mining industry. In a second phase, an interactive geographical map of mining facilities globally will be added to the website in order to explore the energy sources used and provide a more accurate assessment of Bitcoin’s total carbon emissions.