Energy: Is Bitcoin more efficient than the current payment system?

Deepak Gupta June 18, 2022
Updated 2022/06/18 at 9:42 AM

Talking about cryptocurrencies is talking about Bitcoin, but it’s also talking about energy. When talking about cryptoassets, in addition to their appreciation or devaluation, the concept of energy efficiency in mining is always associated and “rumors” say that cryptocurrencies are not environmentally friendly.

A new study claims that Bitcoin is more energy efficient than the existing payment system. Know the data.

Bitcoin consumes 56 times less energy than the classic system

In April, Bitcoin mining energy efficiency increased by 6% in the first quarter. Contrary to what is read on the internet, Bitcoin seems to be on the way to becoming more sustainable. To assist in validating this claim, a new article has appeared on SSRN entitled Bitcoin: Cryptopayments Energy Efficiencyclaims that Bitcoin is energy efficient when compared to the classic electronic payment system.

The author of the article even points out that critics do not compare Bitcoin’s energy usage with that of the existing electronic payment network we interact with when sending money between bank accounts.

In the summary of his article, Michel Khazzaka mentions that...

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.

Energy: Is Bitcoin more efficient than current payments system?

Khazzaka claims that a single transaction on the Lightning network (the protocol was designed to improve the scalability of Bitcoin) makes the cryptocurrency 194 million times more energy efficient when compared to a classic payment and a million times more efficient than a payment transaction. snapshot.

According to the article data, the classic payment system's total energy usage is 4,981 TWh/year, it supports 3.14 trillion transactions per year, and uses 1.58 kWh per transaction. Bitcoin without Lightning has a total energy consumption of 88.95 TWh/year, can do 133 million transactions per year, and uses between 460 and 653 kWh per transaction.

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