Bitcoin Uses 50 Times Less Energy Than Traditional Banking, New Study Shows

view original post

Image source: Getty Images

New research from payment consultancy firm Valuechain finds past energy analyses of Bitcoin were incomplete, inaccurate, and unfairly biased against crypto.


Key points

  • A recent peer-review white paper finds that Bitcoin’s blockchain uses almost half the annual energy of previous estimates.
  • The Valuechain publication also shows that Bitcoin is 56 times more energy efficient than the current banking system.

The Bitcoin blockchain gets a bad rap from environmentalists and critics because its proof-of-work (PoW) programming used to settle transactions is widely portrayed as a hoggish energy glutton that’s stomping all over ecological ideals with its massive carbon footprint.

Some of the most frequently touted research bashing Bitcoin’s power use comes from the University of Cambridge, which pegs Bitcoin’s annual power drain at more than 121 terawatt-hours (TWh), ranking it in the top 30 electricity consumers worldwide. In fact, if Bitcoin was a country, it would be sucking down more energy than either the Netherlands or Pakistan according to the Cambridge data.

To give a sense of how much energy that is, the WorldCounts website states that a single terawatt can power 10 billion, 100-watt bulbs at the same time. And the power panning against Bitcoin isn’t just from theoretical academicians, it’s also coming from leaders within the crypto community itself.

Cardano cofounder Charles Hoskinson verbally bludgeoned Bitcoin’s energy inhalation in a top-tier media article last month stating, “Bitcoin’s energy consumption has more than quadrupled since the beginning of its last peak in 2017 and it is set to get worse because energy inefficiency is built into Bitcoin’s DNA. Bitcoin’s carbon footprint will get exponentially worse because the more its price rises, the more competition there is for the currency and thus the more energy it consumes.”

Flipping the script and energy switch on Bitcoin’s energy use

Frankly, it’s easy to lob eco-bombs against the first and most valuable crypto, even though Bitcoin is down 70% today across cryptocurrency exchanges, from its peak price of $69,000 set in November 2021. However, a recently published peer-reviewed research report calls into question the environmental-focused bluster against Bitcoin. Payment consultancy firm Valuechain published the 27-page white paper titled “Bitcoin: Cryptopaments Energy Efficiency” after conducting four years’ worth of research and data compilation.

The publication asserts that past energy analyses of Bitcoin — including the aforementioned University of Cambridge research — were incomplete, inaccurate, and unfairly biased against crypto. For example, Valuechain specifically criticized a central bank paper titled “The Carbon Footprint of Bitcoin” for cherry-picking debit card use — which is a small element within traditional banking — as the isolated comparator against Bitcoin’s entire ecosystem.

Our top crypto play isn’t a token – Here’s why

We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you’ve probably used this company’s technology in the past few days, even if you’ve never had an account or even heard of the company before. That’s how prevalent it’s become.

Sign up today for Stock Advisor and get access to our exclusive report where you can get the full scoop on this company and its upside as a long-term investment. Learn more and get started today with a special new member discount.

Get started

“It’s essential to compare Bitcoin energy consumption with all the aspects of the classical monetary payment system. This covers: banknotes and coins cash management in ATM systems, card payments, point of sale (POS) payments, banking and inter-banking energy consumption, etc .We’ve endeavored in our paper to answer mathematically and scientifically all these challenges for the benefit of decision makers, researchers, politicians, legislators and industry representatives,” as stated in the white paper.

The Valuechain study went on to calculate the average lifespan of Bitcoin mining rigs; the surge in use of hydro, wind, and solar power by BTC miners; and miners’ adoption of energy-stingy mining tech to determine that Bitcoin’s global network consumes 88.95 TWh per year — almost 50% less than the Cambridge estimate.

Perhaps even more electrifying were the results Valuechain discovered using “physics, information science and economics” to compute, compare, and define an accurate energy use assessment of the traditional banking system — which was determined to have a shocking annual energy use profile of 4,981 TWh compared to Bitcoin’s 89 TWh.

“We demonstrate that Bitcoin consumes 56 times less energy than the classical system, and that even at the single transaction level, a PoW transaction proves to be 1 to 5 times more energy efficient. When [the] Bitcoin Lightning layer is compared to [the] Instant Payment scheme, Bitcoin gains exponentially in scalability and efficiency, proving to be up to a million times more energy efficient per transaction than Instant Payments,” the Valuechain paper reads.

These data serve as reliable, supercharged counter measures that should erode anti-BTC sustainability biases, while bolstering Bitcoin’s reputation as a “net good” in pursuit of net zero emissions going forward.

Earn a $50 bitcoin bonus

Our updated list of the best cryptocurrency apps for 2022 is packed with best-in-class picks. The cryptocurrency apps that landed on our shortlist include perks such as $0 commissions, and one pick that is offering a $50 bitcoin bonus. Check out the list here and get started on your crypto journey, today.

Get the top picks