Devenez Insider

Bitcoin and energy: (very) incomplete sources of information

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Thursday, September 29, 2022

Some sites, such as Digiconomist, are fuelling the debate with figures that are often biased.

The debate on bitcoin's energy consumption is often biased for two reasons.

There is little information

It is sometimes FALSE

If the lack of information is problematic (The Big Whale is also there for that 😎 ), the presence of false information is even more so. And at this little game, some people have become experts.

One of the best known is undoubtedly "Digiconomist".

Since 2016, this site created by Dutchman, Alex de Vries, has been providing ample fodder for the media and certain think tanks, which rely on its now famous "Bitcoin Energy Consumption Index" to talk about bitcoin consumption.

Digiconomist's "peculiarity" is that it systematically retains the highest levels (165 TWh in June 2022), and its methodology of comparing bitcoin's consumption with that of countries (which we used above) is regularly challenged.

Digiconomist also focuses on the electronic waste that bitcoin miners would generate because their machines would be obsolete after... fifteen months. An argument that makes some people smile. "We have machines from 2016 that are still running very well," quips Sébastien Gouspillou of Big Block Datacenter.

An important detail: Alex de Vries has worked for the Dutch National Bank, as well as the Dutch bank ING.

"Serious" studies exist

While credible publications are not legion, there are some nonetheless! The study by the Center of Alternative Finance, an independent laboratory based at Cambridge University, is surely one of the best on the subject. "Their work is of fairly good quality", stresses Sébastien Gouspillou, who does however point out a few shortcomings when it comes to mapping by country.

"Cambridge relies on data from mining pools, whereas many do not provide their real IP address when they want to remain discreet", explains Sébastien Gouspillou. "This is why Ireland and Germany can be among the most 'consumer' countries when there are virtually no miners on their territory.

The example of Big Block Datacenter is quite interesting. The mining company is considered to be in Europe, and more specifically in Belgium, while operations are carried out in... Africa. "Our satellite operator is registered in Belgium," laughs Sébastien Gouspillou.

Another study has also made its mark on the industry. And for good reason, it comes from there! "The Cambridge study is still relevant, but I think the Bitcoin Mining Council (BMC) has better data," points out Romain Nouzareth, whose company Sato sits on this international organisation that brings together the main miners (70% of the global network!).

The study does have one big weakness, however: its data is declarative and its members could be tempted to lie to "greenwash" the industry. Other studies have appeared in recent months and have enjoyed some success. This is the case with the one by Arcane Research, which is also produced by a player very close to the industry players.

In 2022, there is still no "perfect" report on the energy consumption of bitcoin (and cryptos) does not yet exist. But the increasingly important debates on the subject clearly show that things are going to have to speed up. And who knows maybe leading to the creation of a branch or agency dedicated to the subject?

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Cette analyse n'est pas un conseil en investissement. Elle a été rédigée sans prendre en compte votre situation personnelle et notamment votre situation financière, votre profil de risque et vos objectifs d’investissement.

Avant d’investir dans un produit, l’investisseur doit comprendre entièrement les risques et consulter ses propres conseillers juridiques, fiscaux, financiers et comptables.

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