The Bitcoin trade use exponentially large amount of electricity that could easily power your house for a month.
According to a Dutch Bank ING, making bitcoin trade is expensive in a way to counteract those aiming to misuse the currency.
“By making sure that verifying transactions is a costly business, the integrity of the network can be preserved as long as benevolent nodes control a majority of computing power,” wrote Teunis Brosens, ING senior economist.
“Together, they will dominate the verification (mining) process. To make the verification (mining) costly, the verification algorithm requires a lot of processing power and thus electricity.”
He mentioned the amount of energy used in bitcoin trade by saying, “This number needs some context. 200kWh is enough to run over 200 washing cycles. In fact, it’s enough to run my entire home over four weeks, which consumes about 45 kWh per week costing €39 of electricity (at current Dutch consumer prices).”
“Bitcoin’s energy costs stand in stark contrast to payment systems that have the luxury of working with trusted counterparties. E.g. Visa takes about 0.01kWh (10Wh) per transaction which is 20000 times less energy.”
The team said on Wednesday, “Fiat money is still the final form of settlement — governments still collect taxes in fiat money and salaries are still paid in fiat money.”