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Beware of Lazy Research: Let’s Talk Electricity Waste & How Bitcoin Mining Can Power A Renewable…

The reality of Bitcoin’s energy mix

Bitcoin mining is mainly driven by renewable energy — hydro (by far the largest component), solar, wind and geothermal. Period.

In fact, we’ve estimated the lower bound of renewables penetration in the bitcoin mining energy mix to be 77.6%.

We actually think it’s significantly higher than that, but in the name of defensible conservatism, we won’t say what that number is.

Everyone seriously involved in bitcoin mining already knows this — and has known for years — but it’s been surprisingly hard to quantify so we’ve kept our heads down in case we were all somehow wrong. The mining industry is notoriously secretive which makes it exceptionally tough to find or extract quality data.

So how’d we do it?

First, we decided to turn the commonly employed top-down methodology on its head and go bottom-up instead.

This means that instead of picking a single or couple mining units and using their specs as a proxy for the entire network — essentially pretending the entire network is simply a multiple of the same unit(s) — we went the other way around and figured out approximately how many units of each mining hardware exist in the current network.

Over the last year we painstakingly assembled a model of all mining gear produced in quantities exceeding 1000 units. We collected performance specs, volume weighted average purchase prices, batch sizes and total deployment numbers.

From that dataset we calculated that the bitcoin mining network currently draws approximately 4.7 GW, or 41tWh on an annualised basis.

At the time of writing, this figure is falling — and has been since late September. The estimate also includes a 20% excess for cooling, a figure we consider highly conservative.

For reference, there are approximately 85m PlayStation 4, 40m Xbox One and 15m Nintendo Wii U consoles distributed among global households (see our report for full list of sources). Their weighted average...

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