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Don't bitcoin transactions offset from transactions within the classical banking network? How much electricity do banks use?

by c22 6y ago

jabberwcky 6y ago
Nothing close to 120 gigawatt/sec (going by one estimate)
- c22 6y ago
  This first-google-result analysis[0] from a couple years ago puts the global banking system at around 100 TWh a year which is pretty close to the currently estimated "121.36TWh" for bitcoin[1]. Incidentally, that 2nd article mentions that this is equivalent to the power used by inactive-but-on electronic devices in US households alone. I guess PC gaming was at 75TWh 5 years ago [2], so I'm not going to worry too much yet. [0] http://climatestate.com/2018/01/15/energy-consumption-bitcoin-vs-banking-system/ http://climatestate.com/2018/01/15/energy-consumption-bitcoi... [1] https://www.bbc.com/news/technology-56012952 https://www.bbc.com/news/technology-56012952 [2] https://www.forbes.com/sites/michaelkanellos/2015/09/07/the-big-surprise-in-home-energy-consumption-gaming-pcs/ https://www.forbes.com/sites/michaelkanellos/2015/09/07/the-...
  - betterunix2 6y ago
    Total power consumption is the wrong metric; we should talk about the average consumption per transaction. If the totals are close, it means Bitcoin is an extremely inefficient system, since it only processes a fraction of the number of transaction per year that the mainstream financial system processes.
    - c22 6y ago
      I agree, and I don't think bitcoin will ever be efficient. But I don't think any of us can stop it at this point and it still seems less frivolous than many of the things we spend energy on. Since energy consumption has historically always increased and since it drives all of human progress and innovation I'm not convinced that the demand side is where we should focus on solving our problems.
rojeee 6y ago
It's a good point and I'd love to see an analysis of how much electricity an average bank uses or a country's payment system uses. But until now I haven't seen one. I think another point to note is that Bitcoin (and Crypto/DeFi in general) is really just a censorship resistant Casino, and I say this having worked in blockchain and crypto for the last 6 years. As such, the massive electricity usage is all the more egregious. On the other hand. Banks actually add a lot of value whether we care to admit it or not. They provide a working payment network. They provide credit when you need it etc. Yes, the banking infrastructure probably uses a lot of electricity too - somehow those mainframes need to be powered but I'd like to think we can all agree that society benefits from this. Where as, with Bitcoin, only a small few benefit but the cost of running the infrastructure is so high. Maybe a better comparison is how much energy the gold industry uses vs bitcoin mining?
PeterisP 6y ago
Bitcoin settles a very, very tiny proportion of transactions. All of crypto has <1% of global amount of transactions, so they aren't offsetting anything meaningful. Visa, Mastercard, Unionpay, SEPA each settle more than 100 billion transactions per year, bitcoin has less than 0.2 billion transactions per year. Currently bitcoin consumes something like 0.25% of world's electricity for much less than 0.25% of world's transactions, so if we processed all transactions this wastefully, it wouldn't be enough to divert all the power production in the world to do so.
- zalkota 6y ago
  On an average day, bitcoin settles over $10 billion in transactions.

Don't bitcoin transactions offset from transactions within the classical banking network? How much electricity do banks use?

by c22 6y ago

Don't bitcoin transactions offset from transactions within the classical banking network? How much electricity do banks use?

jabberwcky 6y ago

Nothing close to 120 gigawatt/sec (going by one estimate)

c22 6y ago
This first-google-result analysis[0] from a couple years ago puts the global banking system at around 100 TWh a year which is pretty close to the currently estimated "121.36TWh" for bitcoin[1]. Incidentally, that 2nd article mentions that this is equivalent to the power used by inactive-but-on electronic devices in US households alone. I guess PC gaming was at 75TWh 5 years ago [2], so I'm not going to worry too much yet. [0] http://climatestate.com/2018/01/15/energy-consumption-bitcoin-vs-banking-system/ http://climatestate.com/2018/01/15/energy-consumption-bitcoi... [1] https://www.bbc.com/news/technology-56012952 https://www.bbc.com/news/technology-56012952 [2] https://www.forbes.com/sites/michaelkanellos/2015/09/07/the-big-surprise-in-home-energy-consumption-gaming-pcs/ https://www.forbes.com/sites/michaelkanellos/2015/09/07/the-...
- betterunix2 6y ago
  Total power consumption is the wrong metric; we should talk about the average consumption per transaction. If the totals are close, it means Bitcoin is an extremely inefficient system, since it only processes a fraction of the number of transaction per year that the mainstream financial system processes.
  - c22 6y ago
    I agree, and I don't think bitcoin will ever be efficient. But I don't think any of us can stop it at this point and it still seems less frivolous than many of the things we spend energy on. Since energy consumption has historically always increased and since it drives all of human progress and innovation I'm not convinced that the demand side is where we should focus on solving our problems.

rojeee 6y ago

It's a good point and I'd love to see an analysis of how much electricity an average bank uses or a country's payment system uses. But until now I haven't seen one. I think another point to note is that Bitcoin (and Crypto/DeFi in general) is really just a censorship resistant Casino, and I say this having worked in blockchain and crypto for the last 6 years. As such, the massive electricity usage is all the more egregious. On the other hand. Banks actually add a lot of value whether we care to admit it or not. They provide a working payment network. They provide credit when you need it etc. Yes, the banking infrastructure probably uses a lot of electricity too - somehow those mainframes need to be powered but I'd like to think we can all agree that society benefits from this. Where as, with Bitcoin, only a small few benefit but the cost of running the infrastructure is so high. Maybe a better comparison is how much energy the gold industry uses vs bitcoin mining?

PeterisP 6y ago

Bitcoin settles a very, very tiny proportion of transactions. All of crypto has <1% of global amount of transactions, so they aren't offsetting anything meaningful. Visa, Mastercard, Unionpay, SEPA each settle more than 100 billion transactions per year, bitcoin has less than 0.2 billion transactions per year. Currently bitcoin consumes something like 0.25% of world's electricity for much less than 0.25% of world's transactions, so if we processed all transactions this wastefully, it wouldn't be enough to divert all the power production in the world to do so.

zalkota 6y ago
On an average day, bitcoin settles over $10 billion in transactions.