Bitcoins Staggering Energy Usage: Bug or Feature?
In 2021, the whole Bitcoin network assumingly accounted for around 105 TWh of consumed electricity. Put into perspective, the whole country of Germany produced around 518 TWh of electricity in 2021. So it’s rather fair to say that Bitcoin needs a staggering amount of electrical energy for its operations, and it has indeed raised the (governmental) interest of climate-concerned parties. A recent study estimated the climate impact of Bitcoin mining and concluded that Bitcoin it is roughly on the same level as global beef production and burning crude oil as fuel regarding the negative climate impact.
Another often-used angle in this discussion is the comparison between the energy usage of a single Bitcoin transaction and a VISA transaction. It’s rather easy to publish a figure where one Bitcoin transaction comes at an energy consumption of around 1.4mn times higher than the consumption of a VISA transaction (as Statista did here) and then mock the un-fitness of the network in general.
This was never a fitting comparison, as we must acknowledge that a Bitcoin transaction in itself is all set and done regarding settlements, whereas VISA is just one of multiple settlement layers needed to actually transfer money. Therefore, a comparison of the energy usage of Bitcoin and the worldwide traditional banking system is much more fitting. Galaxy…
