Sometimes an idea, stated simply and dramatically, takes hold of the collective imagination and persists. That is why Bitcoin has been associated with consuming more energy than a “small country,” according to the Harvard Business Review, or even “many countries”, according to the New York Times. But five years have passed since this alarming analogy grabbed headlines, and the potency of individual Bitcoin mining machines – aka application-specific integrated circuit miners, or ASICs – has only improved dramatically, leading to greater network efficiency. And for Bitcoin miners, this may also lead to greater profitability.

ASICs’ competitiveness is “just continually getting better and better and better over time,” said Kyle Waters, senior research analyst at Coin Metrics. Recently the crypto data analytics firm published a report describing a novel way to ascertain which machines are contributing the most to the network hashrate, leading to what they believe is a more accurate picture of efficiency than the generally accepted calculations.

The researchers found that, network-wide, the hardware efficiency dramatically improved from nearly 89 joules per terahash in July 2018 to 33 J/Th this May, a 63% decline in energy use for the same amount of work.

They also estimate that the bitcoin network consumes 13.4 gigawatts (GW) of power, 13% less than the commonly used estimate published by the Cambridge University’s Centre for Alternative Finance.

Calling the Cambridge Bitcoin Electricity Consumption Index the “gold standard,” Waters said Coin Metrics innovated on its methodology by pinpointing how much of the Bitcoin network’s hashrate could be attributed to specific machines. If newer, vastly more efficient machines dominated the network hashrate, then the efficiency overall would be better than one that didn’t have this dominance factored in.

Specifications from individual manufacturers show that the two newest machines that Coin Metrics tested (Bitmain Antminer S19 XP and MicroBT M50), were twice as efficient as the two machines they tested that were released in 2016 (Bitmain Antminer S9 and Canaan 1066).

“Manufacturing matters a lot,” said Karim Helmy, an independent researcher and lead author of the report who came up with the method for parsing which machines dominated the network overall. “The overwhelming majority of hashrate is currently generated by newer generation Bitmain machines. And the network is astoundingly efficient.”

Aside from the contentious debate over energy use, Helmy’s innovative method allows for a closer look at the competitiveness of individual machines, which matters a lot to miners. “Miners care, they want to be in the top half of most efficient. And the reason for that is [they] want to survive the halving.”

Machine efficiency becomes an almost existential question in the context of the next halving, which is likely to take place next April. The roughly once-every-four-years event will reduce the reward for successfully mining a Bitcoin block by half. Unless the price of bitcoin rises significantly from the current $30,000 level, the halving will double the cost to miners to break even.

Using the data from the Coin Metric report, CoinDesk collaborated to produce machine-specific rankings of efficiency, dominance and profitability, and then use them to determine the overall competitiveness of 11 popular Bitcoin mining machines.

The overall ranking demonstrates how strong the manufacturer and the newness matter. Our top three machines are all produced by Bitmain, and rank in chronological order based on their relative age. “The state-of-the-art machine is far more efficient now,” said Waters.

Here’s a breakdown of each of the three factors we analyzed and how the 11 machines stacked up.

Efficiency is a simple calculation based on the manufacturer’s specifications of the machine’s performance based on power drawn. What this shows is that the two most recently manufactured models, the S19 XP and M50, both made in 2022, are the most efficient.

One caveat with this calculation: “We have to take this at the manufacturer’s word. Actually observed performance might not be what they say it is,” said Waters.

Coin Metric’s proprietary calculations show that in May 2023 the newest mining machine models were not the most-used on the Bitcoin network. The S19j Pro and S19, released in 2021 and 2020, respectively, are by far the most dominant. The takeaway is that the most efficient models that are the most dependable and well-priced will be more dominant than models that are overpriced or unreliable.

Calculating profitability per machine depended on making several broad assumptions. Energy prices are very specific to a mining operation, and can differ based on location but also what the miner can negotiate with the energy provider. But for the sake of calculation, this model, though global, applied the most recently reported average U.S. average electricity rate for this date in July 2023. This calculation did not take into consideration the initial cost to acquire the machine, however.

The takeaway from all these calculations is simple: the newest machines are the most efficient and profitable. But then to get the bang for their buck, miners need to buy them and use them optimally.