For a long time, the electricity consumption of Bitcoin has been highly controversial. In fact, Tesla CEO Elon Musk stopped accepting BTC as a means of payment at his electric car company, Tesla, due to the environmental damage that crypto produces. In fact, he indicated that only when mining becomes more environmentally friendly, will he accept the currency again.
Well now a study done by the UK financial site MoneySuperMarket, and also published by the prestigious Fortune magazine, reveals a reality: the high electricity costs (with the consequences for the environment) of each Bitcoin transaction, even the most small, such as paying for a coffee or pizza with crypto. At the same time, compare with other cryptocurrencies.
BTC: 1,173 kilowatt/hour
As the report indicates, each Bitcoin transaction consumes 1,173 kilowatt/hour of electricity. That’s the volume of energy that could “power a typical UK home for more than three months and an American home for six weeks,” the authors add.
Bitcoin mining that allows a purchase, sale or transfer, postulates, uses electricity that costs USD $173 per transaction. That number is based on a global average cost per kWh of 9.0 cents over the past 12 months, the report says.
In the analysis, he compared with the most popular cryptocurrencies and revealed the following in terms of electricity spending:
- Bitcoin: 1173 kWh
- Ethereum: 87,29 kWh
- Bitcoin Cash: 18,957 kWh
- Litecoin: 18,522 kWh
- Ethereum 2.0: 0.8729 kWh (estimated)
- Cardano: 0.547 kWh
- Dogecoin: 0,12 kWh
- XRP: 0,0079 kWh
It further notes: “Based on the number of Bitcoin transactions that took place over a 12-month period, we estimate total energy use to be approximately 123 Terawatt hours (TWh) or 123 billion kWh.” This compares it to 39.19 terawatts for Ethereum and just 0.01 terawatts for Cardano, to show two examples.
This means that Bitcoin only uses more energy than 185 countries and is comparable to Norway’s annual energy consumption, he notes.
Regarding the value of the electricity spent per transaction, he makes the following comparison:
- Bitcoin: USD $173
- Ethereum: USD $12,92
- Bitcoin Cash: USD $2,81
- Litecoin: USD $2,74
- Ethereum 2.0: USD $0,13
- Cardano: USD $0,08
- Dogecoin: USD $0,02
- XRP: USD $0.001
How much energy do NFTs use?
He also dedicates a part of the report to reviewing the energy used by non-fungible tokens, NFT.
It highlights that the majority of NFT transactions take place on the Ethereum blockchain, so logic could lead one to believe that an NFT transaction would use the same amount of energy as an Ethereum transaction
Unfortunately, he says, it is not that simple.
“Each step of the NFT cycle requires energy, from adding (or minting) a token on the blockchain, bidding for an NFT at auction, the transaction between the buyer and the seller, and even future transactions in the resale market.
While it varies on a case-by-case basis, it is estimated that the average NFT uses 340 kWh and has a carbon footprint of 241 KgCO2.
We can combine this data with the total number of initial and secondary NFT sales during the last 12 months to find the annual energy bill and the carbon footprint of the NFT market.”
According to the calculation, then, the cost per NFT is USD $50.32.