Impact of mining technology on global bitcoin energy usages

[ParaBoi]

I often hear that improvements of mining technology (more hashes per kWh) would improve Bitcoin energy usage. Isn't that just a misunderstanding? Isn't the energy usage hardly dependent on the actual technology used by the miners, because improvements just lead to a difficulty raise?

Consider this thought experiment. Let's say there were miracle ASICs invented that have 1000 times the hash rate per kWh as current ASICs. What I think would happen is this. At first, miners changing to the miracle ASIC would be hugely more profitable than the others. So others would change to the miracle ASIC, too, and the global hash rate increases, and thus the difficulty. The miners using the old ASICs would get unprofitable and have to scramble to get the new ASICs, too. In the end all would change to the miracle ASICs, some would give up, some would come new, the difficulty would be 1000 times than before and the energy usage just about the same. (All in all the energy usage is determined by the mining reward, because there is an incentive for new miners to come in until most of the mining reward is spent on costs, and energy is the largest cost factor, so there is no coming down as long as POW is used.)

Am I missing something important there?

(BTW: I'm aware that there could be some shifts if e.g. the miracle ASIC is way more expensive than the old ones. My point in this thought experiment is that we wouldn't have to expect a change in the order of magnitude of energy usage, despite three orders of magnitude of change in mining efficiency.)

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[stompix]

I often hear that improvements of mining technology (more hashes per kWh) would improve Bitcoin energy usage. Isn't that just a misunderstanding?

Yes, it is!

Let's say there were miracle ASICs invented that have 1000 times the hash rate per kWh as current ASICs. What I think would happen is this. At first, miners changing to the miracle ASIC would be hugely more profitable than the others. So others would change to the miracle ASIC, too, and the global hash rate increases, and thus the difficulty. The miners using the old ASICs would get unprofitable and have to scramble to get the new ASICs, too. In the end all would change to the miracle ASICs, some would give up, some would come new, the difficulty would be 1000 times than before and the energy usage just about the same.

Perfectly described and it's not an experiment it's just what has happened for years!

There is only one thing that decides the amount of energy spent, and that is the daily reward! If you have $10 as a reward miners will not be able to spend $100 to mine, if the reward is in the billions then prepare for them to have billions to spend on energy!

Am I missing something important there?

The only thing you're missing is part of the reason for this misconception.

People see the hashrate rising despite the price going down and think technology is keeping energy usage lower while increasing the hash rate, but in reality, is just the lag between the price and the deployment of ASICs! So in a scenario where the prices rise to 300k for a week, you won't see the hashrate matching the price, but even if it falls down to $100k you can for sure see both the hashrate and the electricity usage slowly rise to three times what is now.

[hd49728]

I often hear that improvements of mining technology (more hashes per kWh) would improve Bitcoin energy usage. Isn't that just a misunderstanding?

It is true, not misunderstanding.

Bitcoin electricity consumption: an improved assessment. CBECI adjusted their methodology for their Cambridge Bitcoin Electricity Consumption Index too.

See these two figures which shows the improvement of Bitcoin mining rigs including ASICs and difference between old and new methodologies. The report is very insightful that can answer your questions and even can enlighten you more.

Figure 1: Historical evolution of bitcoin mining hardware
Figure 6: Comparison of annual Bitcoin electricity consumption estimates (as of 15/08/2023). The result for 2023 represents the year-to-date estimate.

[stompix]

It is true, not misunderstanding.

Bitcoin electricity consumption: an improved assessment. CBECI adjusted their methodology for their Cambridge Bitcoin Electricity Consumption Index too.

See these two figures which shows the improvement of Bitcoin mining rigs including ASICs and difference between old and new methodologies. The report is very insightful that can answer your questions and even can enlighten you more.

Figure 1: Historical evolution of bitcoin mining hardware
Figure 6: Comparison of annual Bitcoin electricity consumption estimates (as of 15/08/2023). The result for 2023 represents the year-to-date estimate.

Nope, wrong example, unfortunately.  
There was no reduction in consumption, it was just that Cambridge overestimated the consumption by thinking more old gear was present when it wasn't, so nothing went down, just an approximation got corrected.

And again even this correction is about energy prices:

Now, the CBECI doesn’t consider miners that aren’t profitable at “reasonable electricity rates.” It also takes into account the age of mining equipment and how devices tend to depreciate in value.

And let me show you a simple example, one year and a half after the s9 launch the hashrate was the equivalent of 1 million 1350W ASICs, nowadays even with gear that hasn't been yet delivered and is on presale only we need 2 million 3500W machines.
1.3 GW VS 7GW!

[hunterSWIFT]

Advancements in mining hardware have led to greater-energy-efficiency. Newer ASIC miners use less electricity for higher hash rates, reducing the energy consumption/Bitcoin mined.

[Hamza2424]

Advancements in mining hardware have led to greater-energy-efficiency. Newer ASIC miners use less electricity for higher hash rates, reducing the energy consumption/Bitcoin mined.

That's well said but the new devices cost a lot, I've tried to enter the mining setup somehow but after full-time research on the local market and the expenses, I think I cant afford even an entry-level mining ring. Even if somehow I can arrange a mining ring the current electricity costs in my locality are skyrocketing and seem like they are inspired by the Halving cycle of the Bitcoin because every 6 months they boost the taxes and per unit prices.

Hmm, trying to figure out if somehow on the cloud I can rent a few high-end devices where I can get rid of these taxes and energy costs. Still searching for such a platform but until now I haven't discovered any authentic one according to my need and convenience.