Bitcoin mining profitability, electricity consumption, and efficiency-new data from the University of Cambridge

The University of Cambridge recently launched an index for tracking the electricity consumption from Bitcoin mining.

Bloomberg ran a headline saying "Bitcoin Could Theoretically Put Paris Climate Goals Out of Reach," The Guardian said Bitcoin mining is "Killing the planet," and CNN said Bitcoin is a "Disaster" for the environment.

Bitcoin advocates hold that the energy that goes into maintaining the fiat money supply or mining for gold is greater than what is used for the Bitcoin network.

This is exactly why the University of Cambridge launched a new tool that aims to combat the misconceptions and false data regarding Bitcoin's energy consumption.

Developed by the Cambridge Centre for Alternative Finance, the Cambridge Bitcoin Electricity Consumption Index tracks the estimated annual electricity usage of the Bitcoin network in real time.

Annualized electricity consumption by Bitcoin network as of is 58.93 TWh-which roughly equals 0.24 percent of the total electricity consumption in the world.

The lower bound estimates assume that miners are using the most-efficient mining equipment to mine bitcoins, while the upper bound estimates assume that miners are using least-efficient mining equipment possible-as long as mining remains profitable in terms of electricity cost.

While one could remain profitable with mining efficiency of 2.0 J/Gh in 2015, 0.34 J/Gh efficiency is needed in July 2019 to remain profitable if electricity cost is 5 cents/kWh.

Electricity efficiency alone is not sufficient to decide which mining hardware to acquire since the model adopted by Cambridge does not factor in various associated costs in mining like equipment cost, labor, maintenance, and cooling costs.

Misconceptions about Bitcoin mining and energy consumption are frequently used to chastise the cryptocurrency.