Energy saving – l’still young universe of cryptocurrency already suffers from many platitudes and other clichés. An example of this is the energy management and consumption required to mine BTC. Faced with this injustice that sometimes condemns Bitcoin and its use too quickly, the report states Bitcoin: Energy Efficiency of Crypto Payments compared the consumption of traditional financial resources with that of Bitcoin as well as the energy efficiency of the two payment methods. Results.
Bitcoin, a cryptocurrency bursting with energy
The report Bitcoin: Energy Efficiency of Crypto Payments is published by value chain a payment consultancy. It has taken four years to achieve the results obtained in this research led by Michel Khazzaka, computer engineer, cryptographer and blockchain consultant.
To say that Bitcoin does not consume energy would be incorrect and this is the first postulate this report makes. Enumerating Bitcoin’s energy shortcomings is also not the point of the text. However, Bitcoin is a victim of its opponents who like to declare it persona non grata because of its energy consumption.
Proved by the determination of theEurope with its MiCa law supposed to ban protocols Proof of work (Proof of Work), too energetic according to the European institution. Source of fear for the cryptosphere, this law has several times sounded the death of Bitcoin, which resists. The wrath of the SEC and certain national and international regulators is also weighing on the king of cryptocurrencies.
As a reminder, the Proof of work, POW is a block transaction validation system. This protocol solves complex computer calculations to settle transactions and thus ensures optimal security. In fact, according to analyses, this technology consumes between 88.85 TWz and 122 TWz per year (the latter figure is the official result of the Cambridge Bitcoin Electricity Consumption Index†
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Banks can save their energy better
In this face-to-face, the report underlines that, depending on the angle one places itself in, traditional financing should also incur energy bills. The researcher underlines with relevance that we forget certain parameters when calculating the pollution of the banking system. It is therefore necessary to take into account the importance of energy consumption intermediariesabsent on the side of the bitcoin network †
- transport money;
- the energy consumption of banking infrastructures (electricity, pollution of employees to travel to work, pollution of money convoys by Brinks, etc.);
- the banknote making process;
- money management;
- bank and interbank payments.
Taking these parameters into account, the study arrives at a total of 4981 TWh / year. In other words, Bitcoin spends only what it needs to exist. Bitcoin is self-sufficient. In contrast, a bank pays collateral energy costs to perform the service you request from it. The Lightning Networkpayment network pear to pear allows to make a payment without intermediary from point A to point B. Backed up by a slew of calculations that we can’t reproduce, the report comes to this conclusion:
“We show that Bitcoin consumes 56 times less energy than the classic system, and that even at the single transaction level, a PoW transaction is 1 to 5 times more energy efficient. †
Banks vs Bitcoin: Which Payment System to Choose?
Bitcoin in combination with the Lightning Network would then allow it to become active 194 million times more efficient than the traditional payment system and more economical which’Direct payment (instant transfer offered by banks) or the SWIFT system. It would therefore be for traditional financial institutions to reduce the massive monetary issuance. It could also increase the circulation of electronic money. Central banks are becoming heavy energy consumers.
Khazzaka, faced with the evidence from these studies, told our colleagues at Coin Telegraph:
“Bitcoin Lightning, and Bitcoin in general, are really great and highly effective technological solutions that deserve to be widely adopted.”
Lightning Network capacity is also mentioned for its effectiveness in the face of mass adoption. Bitcoin network can pay out 31 billion transactions per day compared to 31 million for traditional payment networks† This discrepancy is due to cross-border systems. They suffer from a low number of transactions per second (about 1,000 per second for the SWIFT payment system).
† In conclusion, at the level of a single transaction, Lightning enables Bitcoin to achieve 194 million times more energy efficiency than a classic payment and up to 1 million times more than an instant payment, (…). †
The fall of Bitcoin, bear market for cryptocurrencies, wrath of regulation, deteriorated macroeconomic context… so many threats hover over Bitcoin. Rejected by the mainstream media who previously kept it secret, a message like this is welcome and essential even in these bleak times. We will not spare the verb to praise the merits of created by Satoshi Nakamoto.
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