# Banking on Blockchain: Costs Savings Thanks to the Blockchain Technology
## 4 The Bitcoin System
### Ecologically Unfriendly and Friendly Protocols: PoW vs. PoS
Figure 1 shows these expenditures over time in a logarithmic scale. It highlights hardware expenditures increasing over time until 4 October 2014. Then, this increasing trend ends and the hardware expenditures range between $100 million and $382 million, this last value being the highest value reached exactly on 30 October 2014. The electricity expenditures incurred by the network to fuel the Bitcoin system, and hence the power consumption attributable to the Bitcoin system, shows a very similar trend. This is because these expenditures are also computed dividing the real total hash rate in the network by the power consumption \(P(t)\). Using the fitting curve of the power consumption \(P(t)\), we estimated the power consumption of Bitcoin system from 1 September 2010 to 31 December 2016. Figure 2 shows this power consumption in a logarithmic scale, and Figure 3 expands the \(x\)-axis to highlight the power consumption from 1 October 2015 to 31 December 2016. Figure 2b shows a power consumption increasing over time until 4 October 2014. On this date, the estimated power consumption was equal to 355.46 MW. Starting from September 2014, this increasing trend ends, and the power consumption ranges between 100 MW and 200 MW (see Figure 3). Figure 4 shows the annual energy consumption expressed in kWh, from 2011 to 2016. It shows the decreasing trend of the energy consumption in the last three years. This is in agreement with the introduction on the market of mining hardware more and more efficient. All figures just described highlight that the Bitcoin system, as every system using PoW, an ecologically unfriendly consensus mechanism, incurs high electricity and hardware expenses in order to increase the probability of mining bitcoins by buying hardware more and more powerful. Despite of this, as already mentioned in the Section 1, all systems based on blockchain technology, both those using PoW and those using PoS, only have to connect to the network and do not incur such electricity costs from ATMs, in costs from gas consumed by employees or in waste including for example paper and toner for printers. Furthermore, in these systems, the production cost of the cryptocurrency is included in the cost of mining activity that comprises also the costs of transaction validation and in turn the distribution costs of the cryptocurrency. Figure 1: Total estimated investment to create the Bitcoin network. Figure 4: Total energy consumption per year. Figure 3: Estimated power consumption of Bitcoin system, from 1 October 2015 to 31 December 2016. Figure 2: Estimated power consumption of Bitcoin system. Regarding the carbon footprint of Bitcoin system, let us cite an article entitled \"Does Bitcoin Have an Energy Problem?\" by [39], that gives an estimation of the million tons of CO\({}_{2}\) created by the Bitcoin system when all Bitcoin will be mined. _\"The total circulation of bitcoin is capped at 21 million, at which point there will be no more mining. Currently, there are just over 14.7 million in circulation. That leaves 6.3 million to be mined. At a cost of $150 a coin and 1.5 tons of CO\({}_{2}\), it will cost nearly a billion dollars and create over 9 million tons of CO\({}_{2}\) just to produce the remaining bitcoins. If we assume that all bitcoins were mined as cheaply as $150 a coin, then it cost $3.1 billion to pay the electricity costs to put all those coins in circulation. It would also have created 31.5 million tons of CO\({}_{2}\)\"._  
This article refers to an article by [40]. The actual Bitcoin system, in agreement with this article, has an impact expressed in million tonnes CO\({}_{2}\)/year equal on average to 1, considering a period of 31 years, from 2009 to 2040, 2009 being the year in which the Bitcoin system appeared and 2040 the year in which the system will reach the Bitcoin's cap set at 21 million coins.