Bitcoin 8800
You may or may not have recently read an article about the power consumption behind the bitcoin network, which has been labelled by as an “environmental disaster” – while I see the basic premise behind that thought process, I believe the opposite is in fact the case, and I hope to prove it with numbers below.
A positive environmental impact is one that reduces current levels of consumption, and for that reason I would like to compare the bitcoin network to Western Union.
Here’s some key facts about Western Union
- $81 billion/year in transactions
- 8, 800 Employees
- 510, 000 “agent locations”
On this basis we can conservatively estimate the power consumption required to send $81 billion worth of transactions.
8, 800 employees will each use about 13.4KWH per day (350 watts each for computing equipment 24 hours/day. 600 watts each for heating and lighting, 8 hours per day)
We can also guess that each of the 510, 000 agent locations have some amount of power consumption dedicated to processing Western Union transactions, and at 50 watts for a small device, we are very conservatively estimating each agent uses 1.2KHW per day.
So the Western Union employees total power consumption is around 116.1MWH per day, and the agents power consumption is to the tune of 612MWH/day, for a total of around 728MWH each and every day. That is 8.98MWH for every $1 billion in transactions
By comparison, a very loose estimate of the bitcoin networks current usage, comes in at 975MHW/day.
The only number we need then, in order to make a straight comparison, is how much currency volume the bitcoin network processes each year.
Annualised based on $35million per day (it has been over $100million/day recently), bitcoin processes $12.7 billion worth of transactions per year. So those numbers come in at 76.77MWH for every billion in transactions.
Ok, that doesn’t make bitcoin look very environmentally friendly. 9.98MWH for Western Union, and 76.77MWH for bitcoin… However…
Every four years bitcoins relative power consumption will halve, along with the bitcoin mining block reward, and as mining becomes less profitable. This has absolutely no negative impact on the integrity of the bitcoin network, but it does reduce power consumption (since miners need to operate at a profit).
