The researchers behind the renowned Cambridge Bitcoin Electricity Consumption Index (CBECI) have officially revised their methodology for the first time since its inception in 2019, aiming to enhance the accuracy and reliability of the index’s predictions. CBECI was launched in July 2019 to provide reliable data-driven insights into the energy nature of Bitcoin mining and its associated environmental impacts.
Speaking exclusively before the announcement of the revision, lead researcher Alexander Neumueller explained the role of the index in providing relatively accurate predictions about Bitcoin network’s electricity consumption and contextualizing the data in an understandable manner for people.
Key findings extracted from the revised data focused on recent developments in Bitcoin mining hardware and hash rate, and whether CBECI accurately reflected the changing landscape. Neumueller and his fellow researchers highlighted the challenge posed by the scarcity of hardware-related data, which limits CBECI’s ability to accurately assess the types of hardware used by miners and their prevalence.
This led the researchers to create a dataset that simulates the daily hardware distribution based on real performance and power usage data of actual hardware. Neumueller stated that the previous CBECI data assumed that the backbone of the index equally fed the total network hashrate with every profitable hardware model launched within a period of less than five years.
Neumueller explained how he and his team started comparing the data they obtained with the hash rate increases to the recent Bitcoin mining hardware deliveries, using US import data that reflects the ABD sales data of mining hardware manufacturer Canaan.
They used an analysis that took into account a range of in-depth factors to test the hypothesis that the increase in hash rate could be attributed to recently introduced mining hardware.
“This hypothesis was based on US import data, and we looked for additional evidence to confirm it. If Canaan’s sales data represents the industry, it would support this claim.”
Neumueller highlighted the divergence of opinions, with critics claiming that Bitcoin endangers environmental developments and worsens climate change, while supporters argue that the mining industry can combat climate change and provide other societal benefits.
“However, the complex structure of the industry and the lack of information are often overlooked, which opens the door to biased perspectives and data points.”
CBECI includes a wide variety of rich data points and visualizations, such as the index’s estimation of Bitcoin network power demand, a mining map reflecting the geographical distribution of Bitcoin mining hash rate, and a greenhouse gas emission index.
CBECI and greenhouse gas emission indices provide three different estimates for both sectors, offering a hypothetical range for these specific criteria.