Bessemer Trust Calls Ethereum More Energy Efficient Than Bitcoin
Bitcoin Less Energy Efficient Than Ethereum
New York-based asset management firm Bessemer Trust has warned that Bitcoin is less energy efficient than other cryptocurrencies while noting Ethereum is more efficient.
In its latest Quarterly Investment Perspective report titled "The Future of Money", the leading wealth management firm, described Bitcoin in terms of three contexts namely, store of value, mode of transaction, and a ledger of accounts.
As a mode of transaction, Bessemer Trust says Bitcoin:
"remains highly inefficient from an energy-usage perspective,” while adding, “Other cryptocurrencies, such as Ethereum, are more efficient in this regard.”
Bessemer Trust's analysis on Bitcoin's energy efficiency might be right after all.
Data from the Bitcoin Energy Consumption Index indicates that the BTC network consumes approximately 103 terawatt-hours (TWh) of energy per year. While the Ethereum network consumes only 38 TWh of energy per year.
Regarding BTC's role as a ledger of accounts, the report called the Bitcoin blockchain an “incomparable ledger" while praising its security:
“It offers security amid potential government and social instability, yet it simultaneously offers a refuge for those engaged in illicit finance.”
Bessemer says BTC Could Never Replace the U.S. Dollar
BTC as a store of value is appealing as an investment asset due to its limited supply, the report said.
“The finite supply of Bitcoin, in contrast to dollars or other government-produced currencies, is its greatest draw in terms of its ability to retain its value long term.”
However, due to the flagship cryptocurrency’s increased price volatility, the digital asset can never replace the U.S. dollar or even become a part of a current traditional asset allocation, per the asset management firm.
Despite this, Bessemer Trust does acknowledge BTC's increased market appeal amid the rise of digital payments:
