IMF Claims Bitcoin Energy Consumption Is Million Times More Wasteful Than Credit Cards

Bitcoin, the number one cryptocurrency by market cap. (Unsplash)

JAKARTA – The International Monetary Fund (IMF) recently published its latest report stating that the number one cryptocurrency Bitcoin (BTC) is a waste of energy.

The IMF says BTC consumes millions of times more energy than credit cards. The calculations are based on academic and private sector publications.

In addition, the report examined by Xavier Lavayssièr, Germán Villegas Bauer, and Itai Agur, also shows that central bank digital currencies (CBDCs) and some private cryptocurrencies are actually more efficient than traditional payment systems.

Until now, the use of credit and debit cards has dominated various financial transactions around the world. Meanwhile, the emergence of Bitcoin, which is predicted to be a faster future transaction tool, actually consumes more energy than using a credit card.

IMF researchers concluded that electricity consumption is a consideration regarding the future of money, reported by Bitcoin.com.

For information, Bitcoin uses a proof of work (PoW) algorithm consensus that allows mining. On the other hand, the PoW model also requires miners to use high-power computing devices. This is one of the factors that causes BTC to consume more energy.

Bitcoin competitor Ethereum is currently planning to make the switch from PoW algorithm to proof of stake (PoS). The reason is that PoS is claimed to be more environmentally friendly and does not consume large amounts of energy like PoW.