The statistic, which was first shared by Michel Khazzaka this summer, caused quite a stir in the Bitcoin and broader crypto community. He authored his forecasts in a Valuechain report, which he founded to research the world of cryptocurrency payments.

He discusses the thorough research that led to remarkable conclusions in an exclusive Cointelegraph Crypto Story interview. In short, Bitcoin may not be as harmful to the environment as the mainstream news portrays.

Khazzaka, who refers to Bitcoin as money with a memory, attempted to disprove the allegation that the platform is more harmful to the environment than fiat money. He toiled for four years, compiling statistics and crunching numbers. He devised a model, or estimate, to determine how much energy the financial sector consumes.

He stated that he calculated commute times, data centers, servers, and even ATMs from his home in Paris. He did not account for the energy expended in the construction of banks, buildings, and ATMs and the energy expended in manufacturing and transporting the metal. 

Bitcoin uses 88.95 TWh per year, significantly less than the Cambridge Centre for Alternative Finance estimate. Despite this, Khazzaka acknowledges that Bitcoin consumes an extraordinary amount of energy. However, in exchange for an extraordinarily important service, users receive a remarkable level of security.

He contrasts Bitcoin to space travel, describing that even if people don't want to go to the moon, it's a right, even if it uses more energy than a car.

Finally, with a nod to the layer-2 Bitcoin Lightning Network, he confirms that it has promising potential as a payments network. It simply needs to be proven.

What do you think should the banking industry do to reduce its energy consumption? Let us know your thoughts by sharing this article online.

Nov 6, 2022
Digital Lifestyle

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