A new report from CoinShares has ignited a fresh debate on Bitcoin mining's energy consumption, challenging widely circulated estimates from the Digiconomist's Bitcoin Energy Consumption Index (BECI). The research reveals that the actual power usage of the Bitcoin network is significantly lower than previously claimed, and that miners are overwhelmingly reliant on renewable energy sources.
BECI Overestimated by More Than 115%
Earlier this year, Alex de Vries, founder of Digiconomist, published a study suggesting that Bitcoin mining consumes as much electricity annually as the entire nation of Ireland. This claim was picked up by major media outlets, fueling environmental concerns around cryptocurrencies. However, CoinShares has now produced empirical evidence that contradicts these figures. According to Christopher Bendiksen, Head of Research at CoinShares and co-author of the report, “Many miners we’ve spoken to have objected to the data used by Digiconomist; although they don't make their methodology clear, it appears that they have taken a bottom-up approach by assuming a small pool of miners is representative of the community.” The report states that BECI’s assumptions are based on inadequate research, leading to an overestimation of over 115%.
Actual Consumption: 35 TWh
Using a more rigorous methodology that captures global hashrate distribution and mining hardware efficiency, CoinShares estimates that the Bitcoin mining network consumes approximately 35 TWh per year—roughly half of the BECI projection. This finding aligns with other independent analyses that point to lower-than-expected power draw. “Our findings strictly contradict both of these figures and we believe that they rest on incorrect assumptions resulting from inadequate research,” the CoinShares report asserts.
Renewable Energy Dominates Mining Fuel Mix
Perhaps the most striking finding is that Bitcoin mining is primarily powered by renewable energy. The report highlights that cheap hydroelectricity is the dominant energy source, especially in regions with surplus generation capacity. “Overall, we find that contrary to previously reported assumptions, bitcoin mining is largely driven on cheap renewable energy, dominated by hydro, with the limited permanent use of, and some seasonal migrations to, coal-based generation in certain areas of China only representing a small part of the network’s total electricity demand,” the authors write. Chinese southwestern provinces, for instance, have vast amounts of excess hydropower capacity that would otherwise be curtailed. Miners set up operations near these dams to access extremely low electricity prices, often below $0.03 per kWh. This economic incentive naturally steers the industry toward clean energy, challenging the narrative that Bitcoin is an environmental villain.
Implications for the Debate
The report also notes that many miners deliberately migrate to regions with high renewable penetration during certain seasons. While some coal-based generation exists, it accounts for a small fraction of total network energy demand. The research suggests that the carbon footprint claims attached to Bitcoin have been significantly overstated. Even Alex de Vries acknowledged that “the information available is pretty poor quality overall” and called for more scientific discussion. CoinShares’ work provides a much-needed fact-based foundation for that discussion.
As Bitcoin continues to mature, accurate energy accounting will be critical for policymaking and public perception. CoinShares’ report demonstrates that with proper data collection, the cryptocurrency mining industry appears to be far cleaner and more efficient than alarmist estimates would suggest. However, ongoing monitoring is necessary as network growth and hardware evolution may alter the landscape in the future.