Banking system energy consumption is greater than Bitcoin

Banking system energy consumption is greater than Bitcoin

BUSINESS | May 19, 2021 | WOZINGA NEWS

Banking system energy consumption is greater than Bitcoin

  • The report mentioned that the banking industry has multiple settlement layers as required in the retail and banking system. 
  • Some believe that the plummet of bitcoin price is affected due to Musk’s tweets.

By Marielle Petere Wozinga Journalist

Banking system energy consumption is greater than Bitcoin

Galaxy Digital released the newest study about the greater consumption of banking system than Bitcoin network, Cointelegraph reported.

It revealed that the energy usage of the traditional banking industry per year is more than 260 TWh while Bitcoin consumes 114 TWh.

Bitcoin energy usage

On May 14, Galaxy Digital provided the result of its new study, “On Bitcoin’s Energy Consumption: A Quantitative Approach to a Subjective Question.”

Meanwhile, this report discussed that the banking system consumes a lot of energy than the Bitcoin network.

To dig in deeper, it stated that there are three sources for the direct energy usage of bitcoin. These are the nodes, the pools, and the mining machines.

In this regard, the mining machines have become the cause of the oldest cryptocurrency energy usage for approximately 99.8%.

However, it explained that it was because of the machines, also named Application-Specific Integrated Circuits. ASICs execute the Proof of Work (PoW) and make Bitcoin so robust and secure.

On the other hand, the report mentioned that bitcoin does final settlement.

Yet, the banking industry does the multiple settlement layers as required in the retail and banking system, but then, it does not directly report the data on electricity consumption.

By basing transactions in the data centers, branches, card networks, and ATMs, the estimated overall energy consumption globally every year is 263.72 TWh.

It showed that the banking system consumes 131.5% over than 113.89 TWh consumptions of Bitcoin annually.

The favorite headline to panic selling

On the other note, several news outlets talked about how Elon Musk could influence the crypto market. Some believe that the plummet of bitcoin price is affected due to Musk’s tweets.

From more than $64,000, the price of Bitcoin went to $42,860 on Monday since February 2021.

Tesla CEO Elon Musk has become the favorite headline, especially when Tesla has stopped accepting bitcoin and the negative impact of crypto mining on the environment.

Another post of a crypto data analytics company Glassnode, on May 17, stated the short-term holders and new investors do panic selling. But, old investors purchase bitcoin while it is on the dip.

In addition, Square Inc. and Twitter CEO Jack Dorsey mentioned that no one could stop or change cryptocurrency.

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