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Comment by mikeash | Hacker News Reader

Using the same amount of energy as nearly 60,000 office buildings to perform ~300,000 transactions per day seems catastrophically bad. That's about 5 transactions per day per office-building-equivalent.

MasterCard, for example, averages something like 2400 transactions per second. That's around 600 times more than Bitcoin. I don't know how many office-building-equivalents MasterCard uses, but I doubt it's anything like the 60 million that would be implied by equivalent efficiency to Bitcoin.

The US banking system as a whole does something like 4 million transactions per second. Using half the energy that these banks use in order to do 3 transactions per second doesn't sound good at all. Even if your estimate for bank energy usage were 1000 times too low, it would still be ridiculous.

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Only a tiny fraction of the power goes into performing transactions; the total power consumed is independent from transaction rate. Bitcoin in 2009 used vastly less power than today yet had the same transaction capacity. The power consumption scales with the price of Bitcoin[1], which is determined by demand and most of the demand right now is driven by future price speculation.

Interestingly, the new cash-settled CME Bitcoin futures contracts, due to start trading in December, will allow speculation on the future price to take place without requiring possession of actual Bitcoin. These futures may both increase Bitcoin adoption and reduce the upward pressure of speculation on the price.

[1] More accurately, the value of power consumed for mining Bitcoin approaches the value of the block reward plus transaction fees.

You could say only a tiny amount of the power is used for transactions. But given that the transactions are the entire point of the network, all power used by the network ought to be counted towards the transactions, just like we’d count the power used by the lights in a bank towards their transactions even though the lights don’t directly do transactions.

The fact that the power used by Bitcoin is essentially independent of the number of transactions is interesting, but it’s not a plus for Bitcoin, since the network is at capacity already.

Thanks, another interesting number would be number of people employed in each industry. I found for US banks it is about 2 million: http://www.usbanklocations.com/bank-rank/number-of-employees...

I have no estimate for bitcoin in the US (I'd guess 1k - 100k?). Also at the end you slip into comparing worldwide vs US numbers. So both energy and transactions/s will be higher for the correct comparison.

It's not appropriate to look at the number of people working in the finance industry, as the vast, vast majority of finance industry is not employed in transactions; almost all the headcount goes to handle lending, credit, risks and investments. A few percent seems appropriate from what I recall in the banks I've seen, so <100k people maybe for all the payments in US.

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