Banking Is 56 Times More Energy Consuming than Bitcoin, Research Reveals

Recent research by Valuechain examined and compared the energy consumption of the traditional banking system with Bitcoin’s Proof of Work and Bitcoin Lightning mechanisms. Bitcoin blockchain technology often gets slammed in the media as consuming too much energy. However, the recent study reveals otherwise.

The research was conducted by Michael Khazzaka, who is an IT engineer and cryptographer. His research was published on April 20, and the discoveries are pretty shocking, for instance that “Bitcoin payments are a million times more efficient than traditional banking.”

#Bitcoin energy consumption is 56 times less than banking system — Valuechain study

— Bitcoin Archive

(@BTC_Archive) June 16, 2022

Unexpected Figures in Efficiency & Scalability

As the abstract of the research paper says, the results of the study are based on physics and information science as well as economics. “We compute and compare the energy consumption and define what is the energy efficiency of both the current monetary system and Bitcoin crypto payment system.”

Apparently, a single Bitcoin (BTC) transaction on the PoW (Proof-of-Work) based blockchain is consuming up to five times less energy than an instant payment in the current monetary system. In addition, if the results of PoW and Bitcoin Lightning system were combined, it would mean the blockchain transfers are 56 times more efficient than Instant Payments. The researchers also note that if we’d compare Bitcoin Lightning system transactions to traditional banking payments alone, Bitcoin Lightning would outrun the traditional Instant Payments system by a million times.