New Study Reveals Bitcoin Could Be 35.4% More Energy Efficient Than Traditional Banking External

Payless Power, a retail energy provider that services the state of Texas, has analyzed the energy consumption of both Bitcoin and traditional banking to discover which one is better for the environment.

The study sourced electricity consumption of the Bitcoin network from the Bitcoin Energy Consumption Index using the most up-to-date data, while electricity consumption of traditional banking analyzed four major factors which were calculated separately, including data centers, physical branches, ATMs and credit card networks. By comparing the two, the study reveals that the Bitcoin network is much more energy-efficient than traditional banking

The Bitcoin network, often criticized for its high energy use, actually consumes significantly less energy compared to global banking operations. The estimated energy use of the Bitcoin network stands at 167.14 terawatt-hours (TWh) annually. This could be down to the efficiency of Bitcoin transactions and how it relies on energy-intensive infrastructure.

In contrast, the comprehensive energy consumption for worldwide banking totals 258.85 TWh. This includes the energy demands of banking data centers, which are the largest contributors, estimated at 225.45 TWh. Additionally, physical bank branches, independent ATMs, and card networks like VISA consume 22.68 TWh, 2.91 TWh, and 7.81 TWh respectively.

The comparison between Bitcoin's energy consumption and that of global banking systems uncovers surprising insights into the efficiency of digital currencies. Despite common perceptions, Bitcoin operates on significantly less energy—35.4% less—than the combined energy used by worldwide banking operations.

This analysis underscores the potential for digital currencies to offer more sustainable solutions in the financial sector. As we move towards increasingly digital transactions, these findings challenge us to reconsider our assumptions about the real energy costs of our financial choices.

Brandon Young, CEO of Payless Power, a retail energy provider that services the state of Texas, comments on the findings:

“It’s a common misconception that Bitcoin uses much more energy than traditional banking, especially over the past few years with many studies highlighting the excessive amount of energy needed to mine the cryptocurrency. However, our study reveals promising results that if the world were to globally adopt Bitcoin, it would in fact be more energy efficient.

“The disparity in energy consumption underscores the potential for digital currencies like Bitcoin to offer more sustainable alternatives in the financial sector. As we face increasing pressure to mitigate climate change and reduce our carbon footprint, transitioning towards energy-efficient technologies is more important to consider, than sticking with traditional forms. Bitcoin's lower energy usage suggests that decentralized digital currencies could play a significant role in achieving this goal.

“The study also highlights the inefficiencies of traditional banking infrastructures. The fact that global banking operations consume substantially more energy than Bitcoin raises questions about the necessity and sustainability of these systems. It prompts us to reevaluate the energy-intensive nature of traditional banking and explore ways to optimize energy usage within these frameworks.

“In the long run, the shift towards energy-efficient financial technologies like Bitcoin could have far-reaching implications for the future. It could lead to a more environmentally conscious financial sector, where digital currencies coexist with renewable energy sources to create a greener and more sustainable economy. By leveraging the advantages of decentralized digital currencies, we can work towards building a brighter and more energy-efficient future for generations to come.”

Read the full study here: https://paylesspower.com/blog/the-bitcoin-network-vs-world-banking-energy-consumption/