TL;DR: greenSpice is a column exploring how cryptocurrency and the environment interact. A new investigation by developer Jonathan Silverblood claims bitcoin cash (BCH) is more than 40% efficient than bitcoin core (BTC) when it comes to energy consumption. He arrived at this conclusion by factoring in publicly available data, and making educated assumptions about other parameters. CoinSpice caught up with Silverblood to ask about his findings and their implications.
Bitcoin Cash Efficiency Beats Bitcoin
The energy consumption of blockchain-based systems has been a moot point since their inception. Proof of Work (PoW) cryptocurrencies are generally thought to require a lot of energy in order to secure a network and verify transactions, keeping a blockchain humming. And while some believe all crypto mining is too energy intensive, it’s not the case cryptocurrencies require the same levels of expenditure.
A new report by Jonathan Silverblood, a Bitcoin Cash developer, found transactions and operations on the BCH blockchain are vastly cheaper than on its sibling, BTC, for example. By taking some key numbers associated with the concept of mining on both chains, he has reached interesting conclusions: users wind up expending 43.1% less energy per transaction with BCH over BTC.
If BCH blocks are fully used for payments, the energy cost per transaction gets as low as $0.01 due to the block size scaling, making transactions cheaper, while if BTC blocks get filled with payments, the transactional energy cost alone will be $5.81.
Jonathan Silverblood Elaborates on His Findings
Silverblood is best known for Cashual Wallet and Cash Accounts. He was careful to point out to CoinSpice that although he does believe BCH is more efficient, blockchain-based systems still have a ways to go in order to be considered anywhere near energy efficient by world environmental standards.
CoinSpice: What motivated you to even make this comparison?
Jonathan Silverblood: People were talking about bitcoin cash as somehow great in terms of energy efficiency. While it’s better than BTC in all measured metrics, and has a much better potential, it is still far from great. I wanted to visualize or show people so they have more realistic expectations, and hopefully spark more debate about what kind of energy efficiency we should work towards, instead of just hoping that everything will randomly turn out great.
How did you get to the numbers you have?
The numbers marked as “measured” and the hashrate estimate come from Blockchair’s API. The assumptions are arbitrary but have been adjusted based on feedback from miners and other knowledgeable people, and so should be close to reality today. The rest is just basic math. The BTC 2mb block size used in the calculation is an estimate by Segwit proponent Jimmy Song.
So more adoption of bitcoin cash would save energy?
Yes and no. This is a simplistic model. Full adoption and “blocks full of payments” mean different things. I assume in the math that all else will remain equal in order to illustrate a broader point: more transactions per block means less wasted energy.
In reality, more adoption of BCH would result in higher hashrate and higher price. The end result will inevitably be better than with BTC, but how much better is difficult to predict.
I also want to stress I truly believe that the costs we pay today in terms of energy and electronic waste will be justified once we manage to scale beyond gigabyte sized blocks, and therefore achieve respectable energy efficiency for all mankind in the future.
In a way, both blockchains are highly inefficient?
Today, yes. The reason is that the energy used to secure the network is not paid for by the users, but rather the block subsidy. Inefficient in this context should be noted to only refer to energy usage per transaction. Blockchains as a concept are highly efficient in other contexts.
What would be your recommendation for the future of blockchain-based tech?
My recommendation with regards to energy usage would be to be more aware of the intended long-term goals. Right now, not a single person I have talked with knows what energy efficiency we should strive for or what energy efficiency level is “good.” We are more than 10 years out from inception. We should be more aware of our target goals by now.
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