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?
WoW ! Yes... I have thought about this... and answers and clarifies it and more. and now I'm sitting here feeling a lot better about bitcoin
Best wishes, - @splendorhub
Thats nuts ahah, in Australia if you were to mine BTC it would cost you like 10,000 dollars a month. We have easily the worst infrastructure in Aus
Keep electricity charges aside. For every transaction Visa or MasterCard charges around 2 percent as transaction and Bitcoin charges far less.
Really?!?!?!
That is a massive amount of energy! Just imagine how many bitcoin transactions occur every second or every day to come up with an absurd amount of energy and CO2 dumped into the atmosphere! Oh bitcoin...
That's what enable bitcoin to remove the need of a middlemen!
It's pretty interesting to see how things have played out to get to this level. I remember mining way back in the day when just a basic CPU could mine BTC.
Do you think the intention was that mining would become easier due to advancements in technology that correlated with improvements in electrical consumption? I can't imagine this was the original plan...
That’s why I am so bullish on EOS, scalability is very important especially when you pretend to go mainstream...bitcoin could actually solve its scalability issues, it is a long way ahead though.
...Is it that the Bitcoin network is consuming this much to be running, and creating new token etc?
The per transaction measurement your using seems to some kind of division of that total power drain - not sure how you could compare that to a ViSA transaction, is like comparing an apple to an orange. I take the poin though a better system is definitely needed over traditional PoW and even PoS, hence why I'm using Steemit.
So its clear, we just need to invent new energy source :)
@martis6 The sun was created so Bitcoin could be born
Also, how can this be true when 1 kWh is like $.10 so 200 would be like $20? Are we combining transactions or something to get this figure?
Hope this solution will be resolved after bitcone hard frog
Why not we replace them with steem dollar😊😊😊
Great article... But you need to clarify what the actual problem is with this because I don't seem to get it..
If we are talking about environmental issues, I totally get your point...Then creating Bitcoin is absolute madness!!
From an economic point of view, I don't see the problem.. First of all, all the producing is divided amongst thousands of computers, and production costs are still lower, than the expenses..
Question for you.... How much does it cost to produce 5000 dollar, if you count in everything..producing, delivering, safekeeping, administration, transport and so on... Bet you that this hurts the environment just as much!!
Just my thoughts!
Good thing, for the world, that renewable energy is entering the picture and scaling up massively.
Over the next 5 years, solar and wind placements will exceed those over the last 20 years.
It is an interesting concept that the security of the blockchain is due to the expense in terms of energy. The discussion about security versus usability/scalability will have to take place.
i cant say anything.no one knows that what will happen.thanks for sharing your potential.
Oh Omg! Your page amazing. Thanks for its post 😱
And I still wanna build me a rig :D
Nice article buddy!
That is insane! Sort of related, when I was considering a mining rig, I realized many Bitcoin ASIC miners run off 220V circuits instead of 120V due to the amount of power necessary, and were not safe to use in my home in the U.S. Nice post!
Hi @jrcornel, your post is very interesting... I knew that mining a Bitcoin transaction was a time consuming task but never thought about the massive use of energy. Following you for other amazing posts!
Great post man! Thanks for information
Thanks for sharing, I knew consumption was high but never that much!
That is suprisingly amazing. I have never heard of this. Im glad i read about the electricity rate in building a coin
So this is why miners get huge electricity bills? Cool! Thanks for sharing this.
Harika makale tebrik ederim, çok açıklayıcı ve özenle hazırlanmış bir yazı 🤗 👏
Great
thank you for bitcoin article.
Superbly interesting stuff, resteemed.
Interesting, it is, but is comparing electricity really a fair comparison? I'm not sure its possible, but wouldn't it make more sense to compare energy? VISA has brick and morter buildings, running the lights, is that accounted for? All the employees driving back and forth to work. In my understanding, which is lacking somewhat, many bitcoin servers only full power up when electricity is cheap, or overly plentiful, so at least some of computation shifts to utilize under utilized energy, which could help level energy loads.
informative post. Upvoted. Follow me if you can👊
This is why we need Proof of Stake to work.
That is amazing. I never realized that, actually, I never considered the amount of power required. That might contribute to the long wait times for transactions to be processed.
Alot of the newer cryptos, such as steem, takes a only couple of seconds to process. Those, I assume, would use just a fraction of the power.
Great article @jrcornell
Following you now
Wow I'm shock,, this kinda weird buh Bitcoin is looking more valuable this days
The comparison would make more sense if it was $ of electricity per average $ of transactions.
Thanks for sharing!!
Thank you, very useful information!
Thank you for this information. Insane if true. This is why we need Gridcoin and Solarcoin to replace bitcoin over time.
Believe it or not. In a bitcoin per month the electricity cost could power our home 36 times more per month.
The monthly cost can buy you a new iphone X. hahaha
Yeah its mental. Bitcoin in its current form will never be used by many for transactions. Expensive, complicated and slow, exactly the opposite of what it was designed for.