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Bitcoin mining is becoming very energy-consuming

Bitcoin transactions require so much energy that the electricity used for just one trade is sometimes enough to power a private household for nearly a month. This is according to economic research carried out by financial services company ING Group. The research was carried out by Teunis Brosens, a senior economist at ING; a financial conglomerate with nearly 1 trillion USD under management.

Comparing the energy used for a bitcoin transaction to that required to run his home in the Netherlands, Brosens says: “[My home] consumes about 45 kWh per week, costing 39 EUR of electricity (at current Dutch consumer prices). [For comparison] verifying one transaction on the bitcoin blockchain consumes about 200kWh.”

The ING senior economist also claims that not only does confirming bitcoin transactions consume an enormous amount of energy, but this amount is exponentially higher than that required for more traditional electronic payment systems. Giving an example, Brosens said that “Visa takes about 0.01 kWh per transaction, which is 20,000 times less energy”.

Below is a chart showing the results of ING’s economic research:

I’m not an expert in this field, but this research seems distorted to me. I’d add that on bitcoin.org, bitcoin developers claim that energy consumption is a problem for miners, rather than bitcoin itself, claiming that in the future; miners will need to switch to more energy-efficient equipment.

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Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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