The discussion about the energy consumption of the Bitcoin (BTC) network has become one of the main arguments against the crypto industry today. The mining of proof-of-work cryptocurrencies like bitcoin reportedly wastes huge amounts of energy. However, a new study finds that the traditional banking sector is even less efficient. It states that banks consume as much as 56x more energy.
Banks turn out to be ‘energy guzzlers’
The new research recently published by IT engineer Michel Khazzaka states that payments in the form of bitcoin are a million times more efficient than transactions made through the traditional banking network. In addition, the entire banking sector reportedly consumes about 56x more energy than the Bitcoin network. In an interview with Cointelegraph he gave some additional explanation about the research:
“Bitcoin Lightning, and Bitcoin in general, are really great and highly efficient technological solutions that deserve to be widely adopted. This invention is brilliant enough, efficient enough, and powerful enough to be widely adopted.”
Bitcoin’s energy consumption appears to be not too bad
A study by the University of Cambridge is often cited when it comes to the total energy consumption of the Bitcoin network. This research states that Bitcoin needs a total of about 122 TWh of power to run properly.
However, Khazzaka’s new research also takes the longevity of mining equipment into account in the calculation. This means that the total amount of power required in the new calculation is a lot lower, 88.95 TWh to be exact. That is even without taking into account the Lightning Network. Perhaps Bitcoin is not the big problem it is sometimes accused of being.
Banks are major users
Taking into account money creation, money transport and the energy consumption of physical banking infrastructure, this comes to a consumption of 4,981 TWh for the banking sector. Rounded up, the “traditional payment sector” consumes about 5,000 TWh per year. Banking thus consumes 56 times more energy than Bitcoin.