Ever wonder how much electricity one Bitcoin transaction uses?
To say that Bitcoin uses a large amount of electricity per transaction is a pretty big understatement.
According to a report out of ING, the electricity used to process a single transaction could potentially power a small home for almost a month.
A month!
Yes you read that right.
Is this surprising?
Perhaps the actual comparison of powering a house vs. a single transaction might be, but the fact that Bitcoin uses a lot of electricity shouldn't be.
Bitcoin was designed to use a ton of electricity on purpose.
It's electricity consumption goes hand in hand with it being so secure.
By making sure that verifying transactions is an exhaustive and costly business, it ensures that the network integrity is preserved.
Well at least as long as the majority of the computing power is being controlled by benevolent nodes, but that is another topic entirely.
Basically, by Bitcoin using a lot of electricity to verify transactions, it makes fraudulent transactions costly and helps detour those who would seek to misuse the currency.
To further put things into perspective...
According to senior economist out at ING, Teunis Brosens, a Bitcoin transaction uses roughly 200kWh.
To put that into perspective, 200kWh could run about 200 wash cycles out in the Netherlands (where Brosens lives).
To further put that into perspective, Brosens went on to say that his house uses approximately 45kWh each week in electricity consumption, which means that 200kWh is enough to power his house for over 4 weeks!
Now that is pretty amazing when you think about it!
Bitcoin stands alone.
Most of the popular cryptocurrencies use a vast amount of electricity to perform transactions, but as was discussed above, that is by design.
If it were to sacrifice some security of the network it could use less electricity to process transactions, but it would be less secure.
Something to keep in mind though is that not only does Bitcoin use a large amount of electricity to complete transactions, it uses exponentially more than traditional forms of electronic payment.
What kind of traditional electronic forms of payment am I talking about?
Well Visa for example, uses about .01 kWh per transaction.
Take a look at this chart below for a side by side comparison:
As you can see Bitcoin uses about 20,000 times more electricity than Visa to perform a transaction.
Not only that but Bitcoin also uses over 5x as much electricity per transaction as Ether.
Something many of Bitcoin's critics point to as a reason that Bitcoin will never scale.
Several other cryptocurrencies have experimented with vastly less electricity consumption per transaction. Which seems like it will be a must going forward if any currency is to catch on as a primary method of transaction.
Stay informed my friends.
Sources:
Image Sources:
http://www.history.com/topics/inventions/thomas-edison
Follow me: @jrcornel
If you understand it then more electricity we use than less drink water on the earth we have!!! Don't you think we pay for Armageddon is coming asap? Crazy people.
It costs a lot to mine for real physical Gold as well. Are you advocating laws be passed to stop that frivolous use of resources?
.
Which of course leads to the classic question, "Who died and made you ....... ?"
Well, I like the idea to save the planet for our next generation, while the idea to turn off the electricity on the whole planet doesn't sound for me as nice as the first one. So I would choose something in the middle - To make critical decisions only in the most urgent cases and to do something if there is a really huge need in it, moreover if it will have crucial consequences. Something like that :)
To mine 1 bitcoin, it would cost you an iPhone X for electricity. Imagine that haha
Data has to be wrong. Electricity in US is 12 cents per kWH on average. So $25 per BTC transaction for 200 kWHs?
Lets assume that government controlled price of electricity in China was 10X lower. That is still $2.50 per BTC transaction.
Conclusion from this data, if correct - BTC will never be used for routine daily transactions under $20. So it doesn't challenge VISA or MCARD.
As a long term store of value, it may compare to Gold in terms of cost to produce more units and costs for transactions.
Which is fine by me - I never assumed BTC would be a daily currency.
I always assumed it was long-term store of value
a very interesting post, @jcornel, and you certainly began a conversation. The way I see it, this is another reason to invest in green energy, not to lessen our cybersecurity because of reliance on costly methods such as coal-fired or gas-powered generation
Is this for real, how did they get to that number?
@cryptoeagle not sure how they got to that number but it is extremly high. Hope it gets better on the next improvements. Upvoted your comment. @gold84
Well, the problem I see is summarized on this quote: "There are three kinds of lies: lies, damned lies, and statistics"
Numbers are typically "massaged" by journalists and politicians. Hopefully, this is one of the things blockchain will eliminate, all the uncertainty and corruption when reporting numbers. The jobs report and CPI by government agencies are glaring examples of these massages. That's why it makes me wonder how they got to these outrageous figures. regards
Not only are some numbers massaged, many are outright lies to begin with. Nothing but fairy tales measuring nothing relevant. Take the unemployment number...
Less people working but the number goes down because people exceed their benefits and fall off the back end.
@cryptoeagle you brought a great fact here. All the misinformation media creates affects crypto too. Same as the stupid words from jamie dimons, that brought loses to several people, specially new adopters I believe. upvoted. @gold84
The electricity issue is a blocker for many people I know to adopt cryptocurrencies. I can really understand the argument, especially today where one should be more careful about Earth's resources.
On the other hand, as you kind of said it, this amount of electricity gives its value to the BTC.
Wow! I never dreamed it would be anywhere close to that amount. Other cryptos are secure without all that waste
Firstly I thought that it's only like this type of home
But then I get more data and I fall out
Maybe bitcoin is do more damage than value.
The higher cost of electricity per transection of bitcoin actually increased the value of a Bitcoin.
Good analitical post. Hope to ger some more soon ...
I wonder how much power all those brick and mortar banking institutions and their employees use every month?
Well they are using solar power to make that electricity, right? /s
Seriously though, that is just crazy. 200kWh per transaction and what, 300,000 transactions per day? So we are doing 60 million kWh every day?
That means that BTC electricity coats is about equal to all of Puerto Rico. It is a small fraction of the world's output, but yikes!
How does a Steem transaction score on this?