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by jeffe 1755 days ago
Let's not commit the fallacy of comparing unrelated big numbers. How does the energy and time per usd transferred compare between btc and the traditional banking system?
2 comments

I did a quick calculation. If you assume all of the U.S. energy consumption goes into stocks and forex trading (the only numbers that were easy to google quickly), dollar trades are about the same dollars traded per kWh as bitcoin, maybe a tad worse.

In actuality, there are more dollar transactions that doesn't include, so the numerator is bigger. It also uses much much less than the total U.S. energy consumption, so the denominator is much much smaller.

A bigger numerator and much much smaller denominator tells me that bitcoin is much much less efficient than traditional systems in dollars traded per kWh.

It's much, much less efficient if you measure the utility of the banking system vs. the utility of cryptocurrency.
Okay, so if we're using energy consumption per unit 'utility' as a metric, how much energy should bitcoin consume to be in line with its utility?
Off the top of my head, I could see it as reasonable to pay a 5-10% cost in energy efficiency comparing with traditional transaction systems to enable a truly decentralized model. Bitcoin is nowhere near that in terms of cost/transaction.
I was going to do a very fancy calculation but 136 TWh would be perfectly ok if Bitcoin did at at least 5k transactions per second with a transaction fee of $0.10.