Differences between bitcoin and banking in power consumption are subject to subjective analysis

Differences between bitcoin and banking in power consumption are subject to subjective analysis

The Bankroll Carbon report was issued on 17 May through a collaboration between the Climate Safe Lending Network, The Outfit Policy Outfit and Bank FWD. This collaboration made it possible to calculate the emissions generated from a company’s cash and investments, such as cash, cash equivalents and marketable securities.

The report found that cash and investments are the main source of emissions for some large companies, such as Alphabet, Meta, Microsoft and Salesforce.

The energy consumption of blockchain (PoW) proof mains, bitcoin, has been the subject of debate in which the network and its participants, especially miners, have been criticized for their contribution to a ecosystem that could contribute to climate change. . However, recent results have also shed light on the carbon impact of traditional investments.

Bitcoin is often displaced because of its “image”

The Bankroll Carbon report was authored by James Vaccaro, executive director of the Safe Climate Loan Network, and Paul Moinester, executive director and founder of Outdoor Policy Outfit. Commenting on the impact of the report, Jamie Beck Alexander, Director of Drawdown Labs, said:

“Until now, the role of corporate banking practices in advancing the climate crisis has been vague at best. This remarkable report sheds some light. The research and findings of this report provide a vital new opportunity for businesses to help transition our financial system from fossil fuels and deforestation to global climate solutions. Companies that take their climate commitments seriously will welcome this progress and will work urgently to harness this leverage for systematic change. ”

The following are some of the metrics highlighted in the report on the climate impact of the banking sector:

  • Since the signing of the Paris Agreement in 2015, 60 of the world’s largest commercial and investment banks have invested $ 4.6 trillion in the fossil fuel industry.
  • Banks such as Citi, Wells Fargo and Bank of America have invested $ 1.2 billion in that industry.
  • The largest banks and asset managers in the United States were responsible for funding the equivalent of 1.968 billion tons of carbon dioxide. If the US financial sector were a country, it would be the fifth largest emitter in the world, just after Russia.
  • Compared to the direct operational emissions of global financial companies, the emissions generated by investment, lending and underwriting activities are 700 times higher.

Cointelegraph spoke to Cameron Collins, Investment Analyst at Viridi Funds – cryptocurrency investment fund manager – about the reasons behind the systematic demise of the Bitcoin network. He said :

“It’s easy to imagine a storehouse of high – performance, energy – consuming computers, but it’s not easy to imagine the downstream effects of money in circulation that funds carbon – intensive activities. More often than not, it is this demonstration that demonizes your Bitcoin mining. In fact, the entire banking system uses more electricity in its operations than the bitcoin mining industry.

In addition to so painting the “picture”, various attempts have been made to track the precise energy consumption of the Bitcoin network operation. One of the most widely adopted measures for this complex variable is calculated by the Cambridge Center for Alternative Finance and is called the Cambridge Bitcoin Electricity Consumption Index (CBECI).

At the time of writing, the index estimates the annual energy consumption of the Bitcoin network at 117.71 terawatt hours (TWh). The CBECI model uses various parameters (network hash rate, miner fees, mining difficulty, mining equipment efficiency, electricity cost and energy usage efficiency) to calculate the annual network consumption.

The growth in the number of subscribers and related activity on the Bitcoin network is reflected in the monthly power consumption of the network. From January 2017 to May 2022, monthly electricity consumption increased by more than 17, currently ranging from 0.62 TWh to 10.67 TWh. By comparison, companies such as PayPal, Alphabet and Netflix have seen a 55, 38 and 10-fold increase respectively in their carbon emissions.

Collins then talked about the outlook for the Bitcoin network that may change in the future. He added that if more people view Bitcoin (BTC) mining as a financial service rather than a mining activity, the perception of PoW networks may change, and the public may have more value. it as an essential service rather than thoughtless gold ashes. . He also stressed the role of public opinion leaders in communicating the true nature of bitcoin mining to policymakers and the general public.

Working together to solve the energy problem

Recently, there have been several examples of the Bitcoin mining community and the energy industry collaborating to work on mutually beneficial methodologies. US energy company Crusoe Energy is reusing energy from wasted fuel to power Bitcoin mining, starting in Oman. The country exports 23% of its total gas production and aims to reduce gas flaring to total zero by 2030.

Even US energy giant ExxonMobil could not help taking the action. In March of this year, it was announced that Crusoe Energy had reached an agreement with ExxonMobil to extract additional gas from North Dakota’s oil wells to power bitcoin miners. Traditionally, energy companies have used a process called gas flaring to remove excess gas from oil wells.

Read also: Do not break down again? Bitcoin Miners Could Help Solve Big Oil Gas Problem

A report released by the Bitcoin Mining Council in January found that the Bitcoin mining industry increased its sustainable energy mix by almost 59% between 2020 and 2021. The Bitcoin Mining Council is a group of 44 mining companies that show more more than 44 bitcoin mining companies. 50% of the mining power of the entire network.

Cointelegraph spoke to Bryan Routledge, Associate Professor of Finance at Carnegie Mellon University’s Tepper Business School, about how bitcoin’s carbon emissions compare to traditional banks’ carbon emissions.

He said: “Bitcoin (the blockchain) is a technology for record keeping. Is there another protocol that would be as secure but less energy intensive than PoW? There are certainly a lot of people working on this topic. Similarly, we can compare bitcoin to the recording of financial transactions in ordinary banks. »

The reward for bitcoin block mining is currently 6.25 BTC, or over $ 190,000 at current prices, and the current average number of transactions per block is about 1,620 according to data from This means that the average trade reward could be over $ 117, a reasonable reward for a single trade.

Routledge added: “Traditional banks are much larger and therefore have a significant impact on the environment as a whole. But for many transactions, the cost per transaction is much lower – for example, ATM fees. BTC has many advantages, no doubt. But becoming more efficient is an important step. »

Since assessing the true impact of bitcoin due to the significant change in technology and currency is not a quantifiable endeavor, it is important to remember that bitcoin’s energy consumption alone cannot be destroyed. The global financial community often forgets the high impact of the current banking system, which is not offset by corporate social responsibility and other incentives alone.

Florida.  Achieva Credit Union launches first banking app to buy bitcoin (BTC)

Florida. Achieva Credit Union launches first banking app to buy bitcoin (BTC)

Proof of Bet (PoS) will affect Ethereum gas charges

Proof of Bet (PoS) will affect Ethereum gas charges