{"id":463795,"date":"2022-06-16T16:16:31","date_gmt":"2022-06-16T13:16:31","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/banking-uses-56-times-more-energy-than-bitcoin-valuechain-report\/"},"modified":"2022-06-16T16:16:31","modified_gmt":"2022-06-16T13:16:31","slug":"banking-uses-56-times-more-energy-than-bitcoin-valuechain-report","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/banking-uses-56-times-more-energy-than-bitcoin-valuechain-report\/","title":{"rendered":"# Banking uses 56 times more energy than Bitcoin: Valuechain report"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a363c148be53\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a363c148be53\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/banking-uses-56-times-more-energy-than-bitcoin-valuechain-report\/#%E2%80%9D_Banking_uses_56_times_more_energy_than_Bitcoin_Valuechain_report_%E2%80%9C\" >&#8221; Banking uses 56 times more energy than Bitcoin: Valuechain report  &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Banking_uses_56_times_more_energy_than_Bitcoin_Valuechain_report_%E2%80%9C\"><\/span>&#8221; Banking uses 56 times more energy than Bitcoin: Valuechain report  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Fresh figures on Bitcoin\u2019s (BTC) energy consumption, efficiency and scalability serve to expose the banking sector while bathing the world&#8217;s largest cryptocurrency in a new light.\u00a0<\/p>\n<p>A research <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=4125499\">report<\/a> published by Michel Khazzaka, an IT engineer, cryptographer and consultant, calculates\u00a0that Bitcoin payments are a &#8220;million times more efficient&#8221; than the legacy financial system. Plus, the Banking sector \u201cuses 56 times more energy than Bitcoin.\u201d<\/p>\n<p>The report compiles almost four years of research and suggests a new calculation for estimating Bitcoin&#8217;s Proof-of-Work energy consumption. In an interview, Khazzaka told Cointelegraph:<\/p>\n<blockquote><p>\u201cBitcoin Lightning, and Bitcoin, in <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>, are really great and very efficient technological solutions that deserve to be adopted on a large scale. This invention is brilliant enough, efficient enough, and powerful enough to get mass adoption.\u201d<\/p><\/blockquote>\n<p>Khazzaka, who founded payments consultancy Valuechain in late 2021, proposes an alternative to the energy estimates provided by Cambridge Bitcoin Electricity Consumption Index (CBECI). The index, often cited by Cointelegraph, estimates that Bitcoin consumes roughly 122 TW\/H per year. <\/p>\n<p>Taking into account the average lifespan of Bitcoin mining machines as well as the rate at which new IT materials are created, Khazzaka suggests that Bitcoin consumes 88.95 TWh per year, considerably less than Cambridge&#8217;s estimate.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/2e315dcc-3b34-41f0-b317-2804265db859.png\"><figcaption style=\"text-align: center;\">Graph to show total count of mining units over time over 160 months. Source: Khazzaka report<\/figcaption><\/figure>\n<p>A payments specialist who wrote his dissertation about cryptography in 2003, and discovered Bitcoin in 2011, Khazzaka also puts the banking sector under the microscope in order to effectively compare the two monetary systems. Khazzaka told Cointelegraph he \u201creally underestimates every aspect of the banking sector,\u201d and contrary to critics, his report is \u201cbiased to the banking system.\u201d  <\/p>\n<p>Nonetheless, taking into account the creation of money, transporting money, physical banking infrastructure energy consumption, etc, he arrives at a figure of 4,981 TWh. Rounded up, 5,000 TWh is consumed by the \u201cclassical payments\u201d sector every year. Consequently, banking uses 56 times more energy than Bitcoin. <\/p>\n<p>The report examines transaction efficiency revealing that \u201cToday, at current block size and if the blocks are filled to their maximum capacity \u03b7max = 5.7\u00d7 better energy efficiency than the classical system.\u201d However, that\u2019s without taking into account the Lightning Network. In the interview, Khazzaka explained: <\/p>\n<blockquote><p><strong>\u201cLightning will allow the bitcoin protocol to do more transactions without consuming more energy. And this is magic.\u201d<\/strong><\/p><\/blockquote>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The Lightning Network Lunch: A Bitcoin contactless payment story<\/em><\/strong><\/p>\n<p>The report concludes that the combination of Bitcoin and the Lightning Network allows Bitcoin to become \u201c194 million\u201d times more energy efficient than a classical payment system. <\/p>\n<p>For Khazzaka, the report lays bare that the \u201cBanking and payments industry needs to adopt blockchain and maybe even Bitcoin.\u201d While Khazzaka\u2019s conclusion may come as a surprise to the cypherpunks and anarchocapitalists who favor the crypto space, Khazzaka believes that Bitcoin could actually benefit banking:<\/p>\n<blockquote><p>\u201cIf they are courageous enough blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>, it will improve their efficiency and their scalability.\u201d<\/p><\/blockquote>\n<p>Although Bitcoin&#8217;s energy use is frequently critiqued,\u00a0the investigation into the banking sector will come as welcome <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> to many.\u00a0<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/banking-uses-56-times-more-energy-than-bitcoin-valuechain-report\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Banking uses 56 times more energy than Bitcoin: Valuechain report &#8220; Fresh figures on Bitcoin\u2019s (BTC) energy consumption, efficiency and scalability serve to expose the banking sector while bathing the world&#8217;s largest cryptocurrency in a new light.\u00a0 A research report published by Michel Khazzaka, an IT engineer, cryptographer and consultant, calculates\u00a0that Bitcoin payments are&#8230;<\/p>\n","protected":false},"author":1,"featured_media":463796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDYvZThjZmNlZTItNWUzNy00NmQyLWE3ZTctMjBiNjJjMWZiZTliLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74888,74862,74894,78717,75578,75566,74355,70752,70610],"class_list":["post-463795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-banking","tag-bitcoin","tag-blockchain","tag-energy-consumption","tag-proof-of-work","tag-report","tag-adoption","tag-energy","tag-finance"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/463795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=463795"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/463795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/463796"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=463795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=463795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=463795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}