Cambridge University's Centre for Alternative Finance's (CCAF) latest research into bitcoin mining suggests the mix of sustainable electricity used is in decline.
The CCAF, which is part of the Cambridge Judge Business School, uses publicly available data to run a theoretical model to estimate the environmental footprint of bitcoin mining. It does this by breaking down its electricity mix and calculating its greenhouse gas CO2 emission intensity per kilowatt-hour (gCO2e/kWh).
It found that emissions intensity for 2021 was 506.71 gCO2e/kWh, compared to 491.24 in 2020. Data for this year is so far only available up to January, so no conclusions can yet be drawn for 2022 for the time being.
CCAF's bitcoin mining data tools
Since 2019, the CCAF's Bitcoin Electricity Consumption Index (CBECI) has provided a daily estimate of the amount of electricity used by bitcoin mining globally. Additionally, its Mining Map, rolled out in 2020, is used to visualize the geographical distribution of mining activities.
Now the CCAF has combined the two elements to estimate greenhouse gas emissions attributable to bitcoin more fully. While electricity consumption is an important factor, it does not take into account the differing electricity sources that power mining from one country to the next, and how these different countries' relative shares of the global hashrate vary over time.
The uptick in fossil fuel emission intensity in bitcoin mining from 2020 to 2021 could be attributed to a collapse in the share conducted using hydropower since the crackdown on the industry in China last year. In 2020, the CCAF found that China accounted for 65% of the world's total hashrate, with the majority of mining activity there powered by either hydropower (33.7%) or coal (40.4%). Hydropower's share in 2021, however, was down to 18.5%, with coal's reduced slightly to 38.2%.
The CCAF concludes that 37.6% of electricity used by bitcoin miners comes from sustainable sources, compared to 62.4% from fossil fuels. This figure is at odds with that provided by the Bitcoin Mining Council, which says 59% of the electricity used by the industry comes from sustainable sources.
Governments, regulators and others frequently cite the energy-intensive nature of proof-of-work bitcoin mining as one of the main flaws in the world's largest cryptocurrency, with some taking a proactive stance toward attempting to curtail it.
Earlier this month, the White House Office for Science and Technology Policy (OSTP) published a report on bitcoin mining, calling for more research so that federal agencies can minimize harm on the environment and electricity grids.
Furthermore, the world's second largest cryptocurrency ether's recent "merge" from a proof-of-work model to the less energy-intensive proof-of-stake, with claims that it will make it 99% more energy efficient, put further pressure on bitcoin's mining mechanism.