Tesla CEO Elon Musk has been very vocal about his fondness for cryptocurrency despite the general consensus of a lot of his high-profile competition. There have been theories and beliefs pioneered by a lot of his competitors including Microsoft’s Bill Gates about how cryptocurrency is actually bad for the environment since it uses way too much electricity.
Bitcoin Energy Problem?
According to FoxBusiness, Bill Gates noted in an interview that Bitcoin actually takes more electricity per transaction in comparison to any other method that is currently known to mankind. He then gave a firm statement saying it is generally “not a great climate thing.”
The whole theory behind this is that since Bitcoin and other cryptocurrencies exist on the blockchain, which is digital, they would require more computers to be on and miners to be active. This was then noted as bad for the environment in general.
Bitcoin Energy Consumption Debunked
An article by TechCrunch cited a certain finding by the University of Cambridge’s official bitcoin electricity consumption index. It was then noted that Bitcoin miners are technically expected to consume about 130 terawatt-hours of energy or (TWh), which results in about 0.6% of the world’s general electricity consumption.
The huge question is if Bitcoin mining really does take up more electricity than conventional bank transactions in general. Luckily, an article by Medium has made a computation about the general electricity consumption of banks.
Banks Energy Consumption
There are three major costs in banking which are the branch costs, the server costs, and the ATM costs. The article took a conservative number to average the total servers each bank uses. The article then put a very conservative estimation of 100 servers per bank, noting if a server consumes an average of 400Wh since it is always on, banks would automatically consume 800Mwh in server costs alone.
When it comes to electricity consumption, the World Bank notes that there are about 12.5 branches every 100,000 adults in the whole world. Since the total population is 7.6 billion, there are around 70% adults. This would equal roughly 665,000 branches. The sizes of the banks would be tricky. Although they aren’t open 24/7 365, most banks leave the lights, cooling, and other features on. A conservative 15kWh per branch was given.
The ATMs were then factored into the conclusion. There are now 3 million ATMs with 2 air conditioners as well as lighting. The average daily power consumption would be around 48 kWh. The total computation would then be around 26TWh for the servers, 87Twh for the branches, and 26Twh for the ATMs. This would total around 140Twh a year.
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Bitcoin vs Bank Energy Consumption
Elon Musk reacted to a certain Tweet that showed the hypocrisy of the theory that “Bitcoin uses too much energy.” The tweet quoted the phrase while noting the writer could be writing on his $2000 Macbook pro living in his $5,000/month apartment and even sipping on his $10 daily latte.
— Elon Musk (@elonmusk) April 29, 2021
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Written by Urian B.
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