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The team responsible for the Cambridge Bitcoin Electricity Consumption Index (CBECI) has revamped its approach for the first time since launching the Index in 2019. Aimed at delivering accurate data about the energy demands of Bitcoin mining, this revision is a significant milestone in understanding the environmental footprint of the digital currency.
Alexander Neumueller, the leading researcher of the project, spoke to Cointelegraph before the official announcement. He detailed how the CBECI aims to make complex data about Bitcoin's electricity usage easily understandable for ordinary people.
The revised approach gives considerable weight to advancements in Bitcoin mining hardware and the surge in hash rate, which is a measure of computational power used in mining and transaction verification. The update questions what exactly fueled the spike in hash rate in recent years, particularly as new, more efficient mining devices have replaced older, less powerful models.
One of the main challenges the researchers faced was a lack of comprehensive data on hardware types and their prevalence in Bitcoin mining. The absence of such information made it hard to make accurate estimations.
To overcome this, the team created a new methodology that simulates hardware distribution daily. This is based on real-time performance and power usage data. Neumueller said the old methodology presumed that every mining hardware model, which had come out in the past five years, contributed equally to the network's total hash rate. This led to overestimating the use of older mining devices, especially during profitable mining cycles.
The research group noticed that recently manufactured equipment was underrepresented, while older hardware seemed to dominate the methodology. So they made the necessary adjustments. To support these changes, the team cross-referenced increases in hash rates with U.S. import statistics on recent shipments of Bitcoin mining hardware. They also scrutinized public sales data from mining hardware maker Canaan.
Finally, Neumueller noted a split in public opinion. Critics claim that Bitcoin's energy usage undermines environmental efforts, while proponents believe that the industry can be a positive force in fighting climate change.
