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A Dutch bank suggests that the extraction of bitcoin consumes too much electricity

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According to an article published by Business Insider, the Dutch bank ING recently published a study suggesting that the bitcoin extraction consumes too much electricity. According to the report, a single bitcoin transaction consumes as much electricity as a home for a whole month and compares it to the amount of electricity consumed by traditional electronic payment methods per transaction.

In the article, Teunis Brosens, Senior Economist of ING, explains that Bitcoin's energy consumption is so high that it is necessary to make transaction verification a expensive operation, to make fraudulent transactions expensive to those who seek to abuse Bitcoin. transactions take "a lot of processing power and therefore electricity".

Brosens then compared the consumption to that of his house in the Netherlands. He declared:

"This issue needs context: 200 kWh is enough to run more than 200 wash cycles – in fact, you can run my entire house for four weeks, which consumes about 45 kWh per week costing 39 € of electricity (at current Dutch consumer prices). "

According to the ING study, bitcoin consumes an exponentially larger amount of electricity than traditional electronic payment methods such as Visa. According to a chart published on Business Insider, Visa takes about 0.01 kWh (10 Wh) per transaction, while bitcoin takes 200 kWh.

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Things are not so simple

The Dutch bank's piece is not entirely accurate and overlooks a few factors that could easily solve the problem in the future. On the one hand, according to a blog post published by Webonanza in 2015, banks consume more energy than bitcoin miners if we take into account what it takes to run their systems.

The blog post points out that the top 20 US banks consumed 2,628 MW, while the bitcoin network consumed only 246 MW at the time of the article. He reads:

"Thus, the first 20 US banks alone consume 2,628 MW.We wonder what value, if any, these organizations provide to the citizens of the world for this energy consumption (and their carbon footprint), especially with regard to bailouts, and they are only open for a few hours a day, bank days. "

Also, in 2016, the BBC revealed that 70% of bitcoin hashrate was based in China, a country in which the vast majority of electricity is produced by burning coal. This creates a huge carbon footprint but, as Andreas Antonopoulos said, Chinese miners simply turn the electricity they produce into silver, turning bitcoin into a "storage mechanism". energy".

Finally, Bitcoin miners compete with each other and are encouraged to cut costs as much as possible to remain profitable. In the long run, miners could turn to renewable sources of energy to make sure they can stay afloat. HydroMiner, a Vienna-based cryptocurrency mining company, uses hydropower to reduce electricity costs, for example.

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Image from Shutterstock.

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