Despite the repression of miners in China, which led to a significant drop in the hashrate, those who criticized the energy consumption of bitcoin did not stop their attacks.
We will consider the key arguments related to the consumption of the bitcoin network of energy, and try to separate justice from fiction.
In recent years, various studies have talked about various aspects of the BTC carbon footprint, but their methodology was superficial.
Since the network power depends on the hashrate, the type of equipment used by different miners is of great importance.
Thus, studies were usually based on an array of data between the upper and lower bound of efficiency.
There is also a question between renewable and non-renewable sources. One of the best indices for research in this regard was developed by the Cambridge Center for Alternative Finance, according to which the Chinese province of Xinjiang contributes 0% to the total BTC hashrate. Sichuan, Inner Mongolia and Yunnan have 19%, 7.5% and 7%, respectively.
Let's move on. The difference in the national ratio of electricity production from renewable and non-renewable sources highlights the main problem associated with the compilation of data. For example, a report prepared by The Economist's analytical department indicates that more than 85% of the electricity used in Yunnan and Sichuan provinces is generated by hydroelectric power.
However, these facts turned out to be unnoticed, they were overshadowed by the statements of such a large organization as Bank of America:
Almost 60% of China's electricity is generated from coal-fired power plants, while natural gas or renewable energy sources account for less than 20%. In other words, the main contribution to bitcoin mining is made by coal, which is definitely not the cleanest source of energy on planet Earth.
The data array produced by each organization reflects conflicting opinions, so it is better to consider consumption from the point of view of utility.
According to the Bitcoin energy Consumption Index, each bitcoin transaction is responsible for 545 kg of carbon emissions, 1147 kilowatts of electricity consumed and 104 grams of electronic waste. For comparison, a Visa transaction uses only a fraction of this power. Despite the truthfulness of these facts, the key difference is as follows:
Bitcoin and Visa are different payment systems. Bitcoin is completely autonomous and is a self-sufficient network in which all functions from one node to another are performed on the blockchain.
Coinmetrics co-founder Nick Carter commented on the variety of levels associated with Visa:
Transactions on Visa are non-financial credit operations that depend on external underlying settlement nodes. These are the ACH, Fedwire, SWIFT systems, the international correspondent banking system, the Federal Reserve and, of course, the military and diplomatic power of the US government, which ensures the smooth operation of all of the above.
Therefore, when you compare the energy consumption of a large bank transfer and a bitcoin transaction, the results are more comparable than when comparing a single Visa user with a retail outlet using the same system.
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