CCRI methodology to assess the Proof-of-Work-based part of the Sia network.

CCRI employs a standardized methodology for Proof-of-Work networks based on a techno-economic model.¹  A general description of the approach is provided in the document linked in the section below on Methodologies to calculate sustainability indicators for the EU Markets in Crypto-Assets (MiCA) regulation. The following steps six steps are conducted on a daily basis to derive the up-to-date energy consumption and carbon footprint of the Sia network.  All sources on input data are listed in the Currencies and Sources section of CCRI's API documentation.

1. Network Data Generation: CCRI runs a full node to gather and derive required base data, such as circulating supply, hash rate and miner's earnings.
2. Mining Device Selection: CCRI identifies appropriate mining devices supporting Blake2b-Sia based on AsicMinerValue and gathers data on their electricity efficiency and hash rate.
3. Device Profitability: CCRI determines the profitable hardware devices by accounting for the current mining reward and the electricity price.²
4. Hardware Basket: CCRI determines a weighted basket of profitable hardware devices. The weight of a specific hardware device depends on its estimated deployment date. The weight factor assigned depends on the time that has passed since the release date of the hardware device.³ CCRI assumes that a profitable device remains present in the portfolio for no more than five years after its deployment. In the first year, the device is assigned a weight of 1. This weight decreases over time, dropping to 0.8 in the second year, 0.6 in the third year, and so on, until it reaches 0 after five years.
5. Energy consumption: Based on the weighted basket of profitable hardware and the electricity rate combined with the total hashrate of the network, CCRI derives the energy consumption of the total network.
6. Carbon Footprint: Based on data on node locations in the Sia network and grid-level emission factors, CCRI calculates the carbon footprint of the Sia network.

The EU Markets in Crypto-Asset (MiCA) regulation requires token issuers and crypto-asset service providers (CASPs) to communicate sustainability data. In this dashboard, respective sustainability indicators are calculated and communicated.

CCRI calculates the energy and GHG emissions-related MiCA indicators as well as further sustainability metrics proposed in the context of the MiCA regulation. For a detailed overview of methodologies, please take a look at "Methodologies to calculate sustainability indicators for the EU Markets in Crypto-Assets (MiCA) regulation".

¹ This model based on a bottom-up approach has been initially proposed by “Stoll, Christian, Lena Klaaßen, and Ulrich Gallersdörfer. "The carbon footprint of bitcoin." Joule 3.7 (2019): 1647-1661.” and has been refined by the Cambridge Bitcoin Electricity Consumption Index.

² CCRI assumes a constant and average electricity price of 0.05 $/kWh for all proof-of-work-based networks. This is in alignment with the Cambridge Bitcoin Electricity Consumption Index which assumes a constant electricity price of 0.05 $/kWh for Bitcoin (an SHA-256-based algorithm).

³ The estimated deployment date is assumed to be 2 months after the release date as devices need to be delivered first.

See the MiCA Indicators for the Sia Network here.