The blockchain and Bitcoin are becoming quite popular and widespread not only in the financial sector. However, energy-conscious Bitcoin customers have some reasons for concern.
Having the potential to be an alternative to traditional banking, Bitcoin appears to be unsustainable using too much electricity. Christopher Malmo states that the online cryptocurrency uses about 5,000 times more power per transaction than VISA.
“Unfortunately for Bitcoin advocates, the currency uses too much electricity right now—way too much: According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day,” reads Malmo’s article at Vice’s blog Motherboard.
“The actual figure is likely worse, given that a large number of transactions are exchanges and miners moving bitcoins around and other low-value ‘dust’ transactions,” Malmo quoted Matthew Green, a cryptography expert at Johns Hopkins University. “So each transaction where there’s an exchange of goods or services happening is really representing even more electricity.”
Plus, Malmo says the total power consumption of the Bitcoin network is anywhere from 250 to 500 Megawatts (MW). The critic says that the network’s constant power draw is just under 215 MW. It can be enough to power 173,000 American households for a day. The number appeared when Mr. Malmo took into account the “generous miner efficiency” of 0.6 watts per gigahash and the total number of calculations the network can perform per second.
Mr. Malmo also compares VISA’s power usage with that of the most discussed cryptocurrency. The author of the article states that in 2013, VISA processed 58.5 billion transactions. It was enough to power 50,000 US households per day.
According to Hass McCook’s study conducted in 2014, Bitcoin had 99 percent fewer carbon emissions than the banking system. However, Malmo claimed that in 2010, the world banking system’s market capitalization was 1,989 times bigger than today’s total Bitcoin valuation.
“It appears there are significant challenges to ensuring that Bitcoin’s growth minimizes environmental impacts,” Mr. Malmo quotes Jeremy McDaniels, a financial system sustainability expert with the UNEP. “Energy footprints could be an issue of major scale-up is achieved.”
However, Malmo also says that “energy-conscious people looking to use an alternative currency for the masses should probably look somewhere other than Bitcoin.”
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