Good morning a few days ago on Ethereum World News was published an article that compared the electricity consumption of Bitcoin mining with the overall consumption of American banks.

Reading between various articles I could deduce that

the total energy consumption of banking operations and the fiat money coining process is much higher than that of Bitcoin mining, due to the incredible amount of machines involved not only in the process of printing / coining money, but also to manage operations in all bank and branch offices worldwide, including all costs (such as lighting physical premises, computer and other machine management, ATM operations, etc.).

For example, it is estimated that the US banking system alone consumes 9% of the national GDP, if all the power used is included, all the materials used to build and maintain all bank branches, all the money spent to pay the personnel, all the resources consumed by the bank staff … in short, all that is necessary to consume in order to make the system work.

US GDP is almost 19 trillion dollars, so their banking system would consume more than a trillion dollars and a half a year.

Instead, to mine Bitcoin, it has been calculated that about $ 198 million a year is spent, or just a little more than 0.01% of what the American banking system spends. This means that today Bitcoin consumes 10 thousand times less than American banks, including Fed.

Obviously this huge difference is also due to the number of transactions managed, which for dollars is enormously higher than the number of transactions in BTC. Then it is better to calculate the consumption for each transaction.

More or less for Bitcoin we consume on average 5 kWh per transaction. The Visa network instead consumes 3 kWh per transaction, so 40% less. However, paradoxically, the more the number of transactions increases, the more the average consumption per transaction should decrease (while increasing the total), and with Lightning Network, which does not require continuous blockchain writing, the average consumption per Bitcoin transaction will be reduced significantly. It is therefore not to be excluded that in the next few years it may fall below 3 kWh per transaction.

At this point the question that should arise is: if these calculations are correct, does it still make sense to worry about the energy consumption of Bitcoin?

What do you think about it?

I want to remind you thanks to the technology with which bitcoin is built, in fact, it is possible to develop smart grids (smart grids) at accessible costs and within which the concept of producer and consumer is overcome, in which every node of the network is at the same time both producer and consumer of electricity, at lower costs and in compliance with the principles of environmental sustainability. The next time, then, that someone will tell you that bitcoin is energivorous and not environmentally sustainable answer that the cryptocurrencies are not the cause of the energy issue but are the solution to the problems of energy supply that will occur in the near future.

Source image Google not for advertising

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  1. miti

    C’è anche da dire una cosa: molta dell’energia con cui viene minato Bitcoin, come altre criptovalute, proviene da fonti rinnovabili mentre non si può dire lo stesso del classico sistema bancario/fiat.