According to a new report, Bitcoin is 56 times more energy efficient than the legacy financial system.
The energy consumed by Bitcoin (BTC) mining has been a point of debate for many governments and anti-BTC advocates. As a result, Michel Khazzaka, an IT engineer, cryptographer, and consultant, took the initiative of comparing banks to the decentralized digital money.
As per the report, Bitcoin, which operates using the Proof-of-Work (POW) consensus, is 56 times more energy efficient when compared to the energy consumed by traditional banks. This eye-opening study said that BTC payments are a “million times more efficient” than bank-related payments.
The research has been conducted by taking into account the data for four years and it seems that a new calculation for estimating Bitcoin’s POW energy consumption has been suggested.
According to the report, Bitcoin mining consumes 88.95 TWh per year while banks that are responsible for the creation, distribution, and management of money take 4,981 TWh per year. Rounding up this figure, Khazzaka concludes that BTC is 56 times more energy efficient than traditional banks which cannot compete with the BTC network.
Interestingly, this report did not take into account the data related to Lightning Network which makes BTC more scalable and easier to use. It further said that taking into account Bitcoin and Lightning Network, BTC becomes 194 million” times more energy efficient than banks.
On top of that, Bitcoin Mining Council (BMC) revealed that the use of sustainable energy for bitcoin mining has grown by almost 60%.