The Cambridge Centre for Alternative Finance (CCAF) recently released a new study titled “Bitcoin electricity consumption: an improved assessment,” dated August 31, 2023. This revised study addresses concerns about the accuracy of the Cambridge Bitcoin Electricity Consumption Index (CBECI) and has sparked discussions among both cryptocurrency enthusiasts and environmentalists.

The study’s findings have prompted significant reactions, with Daniel Batten, a prominent climate activist and Bitcoin environmental analyst, sharing his thoughts on Twitter. Batten praised the updated methodology, stating that Cambridge’s Bitcoin power/energy consumption estimates have decreased by approximately 25% and now appear to be more accurate. His model supports the new estimate of 13.095 GW, aligning closely with Cambridge’s figures.

According to Batten, the previous CCAF model overestimated Bitcoin’s energy demand by 16.8% in 2021 and 10.2% in 2022. This aligns with his prior research, where he had suggested a 20.6% overestimation. Batten also dismissed claims from Greenpeace USA that Bitcoin consumed as much energy as Sweden. He stated that the claim was based on historical overstatements from CCAF, providing clear evidence to the contrary.

In a more lighthearted observation, the CCAF’s updated estimates portray Bitcoin’s energy usage as equivalent to that of tumble dryers in the US. However, Batten emphasized that while Cambridge adjusted their energy consumption figures, they have yet to revise their emission estimates beyond the direct impact of revised energy consumption.

Batten highlights that emissions are still overestimated by 67.6% due to outdated emission intensity calculations. Nonetheless, he commended CCAF for their transparency and alignment with industry data. He suggests that with certain factors considered, CCAF could potentially reduce their emission estimates to around 34 Mt CO2e/year.

The CCAF report goes on to explain the reasons behind the discrepancies in their previous model. They identified that their assumption that every profitable hardware model released less than five years ago fueled the total network hashrate was flawed. This led to an overrepresentation of older devices. Upon re-examination, they discovered that newer equipment was underrepresented, resulting in significant differences in the 2021 and 2022 estimates, now revised to 89.0 TWh and 95.5 TWh, respectively.

Batten, in a subsequent tweet, declared that the narrative around Bitcoin and energy has shifted. He referenced recent acknowledgments from Cambridge, academic papers, and a KPMG report that awarded Bitcoin a positive ESG rating. However, he cautioned against misinformation that still persists, particularly from outlets such as the NY Times and Greenpeace USA.

While educating the public about Bitcoin’s energy consumption remains a work in progress, Batten remains optimistic, stating, “The process has begun. The tide has turned.” For those interested in exploring the revised estimates and the methodology behind them, the full report is available on the official website of the Cambridge Centre for Alternative Finance.

At the time of writing, BTC traded at $26,041.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.