The Banking Executive Magazine - November 2022 Issue

Cryptocurrency CRYPTOCURRENCY MINING MAP Cambridge University developed also a mining map to track the geo- graphic distribution of Bitcoin’s total hash-rate over time. Cambridge Uni- versity partnered with several Bitcoin mining pools to collect geo-location mining facility data. This geoloca- tional data is based on Internet Pro- tocol (IP) addresses of mining facility operators (hashers) that connect to the servers of mining pools. Each participating mining pool ag- gregates IP addresses on their end to create an average geographic distri- bution of total pool hash-power by country and region. Data gathered includes the following parameters: • Average hash-rate for a given country/region over the selected period. • Country name from the World Bank classification list. • Data period (ranging from daily to monthly). • Period start date in YYYY–MM–DD format. • Province name for pools that want to provide a more granular re- gional breakdown within a coun- try. THE SOLUTION OF CARBON BACKED CRYPTO ALGORITHM The World Economic Forum is pro- moting the responsible use of blockchain and is providing the op- portunity to engage with regulators to bridge the gap between real-world carbon consumption and cryptocur- rency. The World Economic Forum’s Crypto Impact and Sustainability Ac- celerator (CISA) explores issues at the nexus of policy, sustainability, and social impact to help bring about a systemic, inclusive, and effective ap- proach to governing distributed ledger technology. In this respect, the world Economic Forum digital economy initiative pro- poses the solution of a carbon- backed cryptocurrency for tackling climate change, pointing out that the exponential growth of cryptocurren- cies has come at the expense of the environment. A carbon-backed, al- gorithmic currency aims to change that by driving climate action. The responsible development and regu- lation of digital assets will be also crucial for a green economy. Over the last decade, cryptocurrency ISSUE 167 NOVEMBER 2022 the BANKING EXECUTIVE 33 Table 1. Cambridge Bitcoin Electricity Consumption Index (CBECI) parameters Parameter Network hashrate, mean daily Bitcoin issuance value, daily Miner fees, daily Difficulty, mean daily Bitcoin market price, close daily Mining equipment effi- ciency Electricity cost Power usage effectiveness (PUE) The average rate at which miners are solving hash puzzles on a given day The aggregated value of all bitcoins newly issued on a given day The aggregated value of all transaction fees paid to miners on a given day The average difficulty level of the hash puzzle on a given day The fixed closing price of bitcoin as of 00:00 UTC on a given day Measures the energy efficiency of a given mining hardware type Global average price of electricity incurred by miners Measures how efficiently energy is used in a data centre Exahashes per second (Eh/s) USD USD % USD Joules per Gigahash (J/Gh) USD per kilowatt-hour ($/kWh) % Dynamic: COINMETRICS Dynamic: COINMETRICS Dynamic: COINMETRICS (Calculation) Dynamic: COINMETRICS Dynamic: COINMETRICS Static: hardware specs from 100+ equipment types, taken from various sources Static: estimate (assumption) Static: estimates (assumptions) Description Measure/Unit Source