An online tool that launched this week called the Cambridge Bitcoin Electricity Consumption Index, or CBECI, estimates how much energy is needed to maintain the Bitcoin network in real time, before using this to calculate its annual energy usage.
Alex de Vries, a Bitcoin expert at PwC, told BBC News that the network processes fewer than 100 million transactions per year, a “completely insignificant” figure compared to the 500 billion payments processed by the traditional financial industry. de Vries estimates that Bitcoin uses more energy per transaction than all the rest of the world’s banks combined.
It also means that the electricity wasted each year by always-on but inactive electronic devices in the US could power the Bitcoin network four times over. “We want to use comparisons that set the narrative,” one of the co-creators of the CBECI, Michel Rauchs, told BBC News. ”Visitors to the website can make up their own mind as to whether it seems large or small.
In a blog post announcing the new index, the Cambridge Centre for Alternative Finance, which oversaw the work, makes the same observation. “Reliable estimates of Bitcoin’s electricity usage are rare: in most cases, they only provide a one-time snapshot and the numbers often show substantial discrepancies from one model to another,” it says.
Bitcoin consumes more energy than the entire nation of Switzerland, according to new estimates published by researchers at the University of Cambridge.
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