Bitcoin consumption is one of the main topics shared by the cryptocurrency and justifies the reliability of the regulators against it. While many critics claim that the way the network works is one of the most hungry systems on the planet, the latest report from Valuechain consultancy suggests otherwise. This shows in particular that the banking system consumes 56 times more energy than Bitcoin. Details in the following.
4 years of research and a new approach to calculating energy consumption
Michel Khazzaka, a computer engineer, founder of payment consulting firm Valuechain, published the report that opened the banking system in 2021. In particular, he adopted for this research a new approach to estimating the energy consumption of the Bitcoin network and analyzed data collected over four years. While the Cambridge Electricity Consumption Index Bitcoin, which is often used as a benchmark, estimates that bitcoin consumes about 122 TWh per year, Mr Khazzaka speaks consumption of 88.95 TWh per annum.
To arrive at such an estimate, the founder of Valuechain took into account the average lifespan of bitcoin mining machines as well as the speed of creation of new computer hardware. He then went on to compare the banking system based on creating and transporting money, as well as the energy consumption of the physical infrastructure of the latter. Mr Khazzaka concluded that the banking system consumes approximately 4,981 TWh each yearwhich is 56 times more energy than bitcoin.
Bitcoin transactions are much more efficient
The Valuechain report also looked at the effectiveness of both systems and once again argued in favor of bitcoin. It also states that the massive adoption of the Lightning network will allow Bitcoin up to 194 million times more energy efficient than a traditional payment system. ” The Lightning will allow Bitcoin to transact more without spending more energy. And that is magic said Mr. Khazzaka.
While critics would be tempted to accuse Valuechain’s founder of the bias, the latter confirms that his report ” biased in favor of the banking system “. He also suggested that the latter adopt the blockchain, or even bitcoin, to better meet the needs of their customers. ” If they have enough courage with blockchain technology, it will improve their efficiency and inscalability “, he said.
Needless to say, Bitcoin critics and defenders of the traditional financial system opposed to the emergence of cryptocurrencies will strongly oppose this report. However, Bitcoin’s energy consumption can be put into perspective as a financial system and no longer as simple technological innovation.
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Luc Jose Adjinacou
Far from dampening my enthusiasm, an unsuccessful investment in cryptocurrency in 2017 only increased my enthusiasm. So I decided to study and understand the blockchain and its many uses and put forward my pen information related to this ecosystem.