Bitcoin Mining Council paints rosy picture of how much sustainable energy the network is using
On July 1, the Bitcoin Mining Council released its first round of estimates for the energy mix used by the Bitcoin network.
The BMC is a relatively new project with the stated goal of setting new standards for transparency in Bitcoin's energy use, which has become an increasingly controversial subject.
Per its first reports, the BMC claims to have gathered data "from over 32 percent of the current global Bitcoin network in its first ever voluntary survey. The results of this survey show that the members of the BMC and participants in the survey are currently utilizing electricity with a 67% sustainable power mix."
The findings further extrapolate that the global Bitcoin ecosystem uses 56% sustainable energy. Yet the nature of the extrapolation and methodology indicate how the survey's conclusion may be overly optimistic.
The survey depended heavily on BMC member responses and included just three questions, per the methodology:
"1.) How much electricity does your total fleet consume today?; 2.) What is the total % of sustainable electricity within your fleet's power generation mix today?; 3.) What is the total aggregate hashrate of your fleet today?"
In addition to the fact that responses themselves were voluntary, the survey includes no definitions of "sustainable electricity," nor is there any oversight involved in the self-reported figures. Voluntary responses from self-selecting members also make it difficult to build statistically valid conclusions.
Per the fine print of BMC's presentation:
"Estimated global Bitcoin network annualized power based on BMC analysis, assumptions, and extrapolation."
The survey's release comes amid a period of significant upheaval in the global mining sector as China-based operations shut down and attempt to relocate following orders from municipal and provincial governments in that country. Potential destinations for these operations and their hardware include the United States as well as coal-rich Kazakhstan, as previously reported.
As a result of the miner shutdowns in China, bitcoin's hash rate has fallen sharply from its peak.
The bitcoin mining network's difficulty, which determines how hard it is for miners to mine new blocks, could fall by more 20% with the next adjustment in light of the exit of Chinese miners from the network. The next adjustment is expected to take place this weekend.