Cost of maintaining the network: NEM vs Bitcoin


#1

Cost of maintaining the network: NEM vs Bitcoin

In this blog post I’m going to calculate what the actual costs are to maintain the BTC network and the NEM network. I will compare the current power usage and estimate what the usage will be when the NEM network becomes larger and is of equal size (amount of nodes).
Disclaimers:
Please keep in mind that Bitcoin nodes are vastly different than NEM nodes. And that Bitcoin mining is vastly different than NEM harvesting. Read further here: https://blog.nem.io/what-are-poi-and-vesting/
Also this is a comparison of the whole network, not just the miners/harvesters or the nodes.
Also there is a big difference between the networks, only 12 nodes on average are actually mining in the Bitcoin network (in mining pools), all the miners work through these nodes. In the NEM network every node that has a harvester active (which is nearly all of them) is securing the network. This means that vastly more nodes are securing the NEM network than the Bitcoin network (even at this moment), which means much more decentralisation and security is in the NEM network.

I will do all calculations with an average cost of 0.10 $/kWh.

Bitcoin:

Bitcoin works with POW which means that the miner with the highest hashing power has the biggest chance of winning the block chain award and the fees in that block.

According to the website http://realtimebitcoin.info the bitcoin network uses approximately 2500MW (= 2 500 000 kW).

0.1 $/kWh * 2 500 000 kW * 24 h = 6 000 000 $/day
6 000 000 $/day * 365 days = 2 190 000 000 $/year

NEM:

NEM works with POI which means that the harvesting is based on the amount of coins in the wallet and the transaction of that wallet in the network. It also works with delegated harvesting which means that multiple accounts can be harvesting on a single node.
To see how POI works please read here: https://blog.nem.io/what-are-poi-and-vesting/

At the moment there are 424 nodes online in the NEM network. A node usually consists of a cheap VPS that on estimation uses an average of 25 Watt (= 0.025 kW).

0.1 $/kWh x 0.025 kW x 424 nodes x 24 h = 25 $/day
25 $/day x 365 days = 9285 $/year

If we calculate per node:

0.1 $/kWh x 0.025 kW x 24 = 0.06 $/node/day
0.06 $/day x 365 days = 21.9 $/node/year

Let’s assume the NEM network becomes much larger, maybe even as large as the Bitcoin network. Because of the difference in nodes between NEM and Bitcoin nodes can’t be equally compared, so I’m assuming 50 000 are used in the NEM network when it’s used as much as the Bitcoin network. Bitcoin in comparison has 5 800 nodes (but not every node is mining) and on estimation 10 000 to even 100 000 individual miners mining in the pools.

0.1 $/kWh x 0.025 kW x 50 000 nodes x 24 h = 3 000 $/day
341 $/day x 365 days = 1 095 000 $/year

Comparing NEM to Bitcoin:

Current usage:

2 190 000 000 $/year (Bitcoin) / 9285 $/year (NEM) = 235 864

Which means that the Bitcoin network uses 235 864 times more power than the NEM network at the moment.

If we compare with comparable network size:

2 190 000 000 $/year (Bitcoin) / 1 095 000 $/year (NEM 50 000 Nodes) = 2 000

Which means that the Bitcoin network would use 2 000 times more power estimated than the NEM network. Please keep in mind that the Bitcoin network hashing power is still rising exponentially.


Веб-ресурсы NEM / публикации
#2

I made a small graphic based on your facts to highlight NEM´s energy efficiency. The numbers are rounded since it is impossible to scale the graphic, but the numbers may speak for themselve. :slight_smile:


#3

When it comes to security:
Is the NEM network as secure as the Bitcoin network ?


#4

While the Bitcoin network has occasionally had problems with forks or security around accounts, the NEM network has not ever had any of these problems. It is very secure. Especially when you think that NEM was 100% new code and look at any other blockchain with new code and its performance in the first 2 years. ALL of them had problems or are still having problems.


#5

You can also review this report. http://nemflash.com/chinese-report-nem-ahead-many-projects-blockchain-space/

That was an independent research company sponsored by the Chinese government and NEM did very well.


#6

Source: https://motherboard.vice.com/en_us/article/bitcoin-is-still-unsustainable

“A new index has recently modeled potential energy costs per [BITCOIN] transaction as high as 94 kWh, or enough electricity to power 3.17 households for a day. To put it another way, that’s almost enough energy to fully charge the battery of a Tesla Model S P100D, the world’s quickest production car, and drive it over 300 miles.”


#7

On this website (https://digiconomist.net/bitcoin-energy-consumption) it is calculated that the energy consumption per Bitcoin transaction is 293 kWh.

If we calculate this for NEM:
Average 2000 transactions per day (tpd) (http://nemermind.be/dtransactions.html)
641 nodes on line at the moment (https://nodeexplorer.com/)
0.025 kW x 641 nodes x 24h = 384.6 kWh/day
384.6 kWh/day / 2000 tpd = 0.1923 kWh/transaction

If we compare that to bitcoin:
293 kWh / 0.1923 kWh = 1524
So Nem at the moment uses per transaction 1524 times less power than Bitcoin.

If we compare that to Ethereum:
61 / 0.1923 = 317
So Nem at the moment uses per transaction 317 times less power than Ethereum.


#8

The average transactions of NEM in the last 7 days is:
(10400+13381+12420+16389+11276+5268)/7 = 10704 tpd
634 nodes on line at the moment
0.025 kW x 634 nodes x 24h = 380.4 kWh/day
380.4 kWh/day / 10704 tpd = 0.0355 kWh/transaction

Bitcoin is estimated at 272 kWh/transaction
272 kWh / 0.0355 kWh = 7662
So NEM at the moment uses per transaction 7662 times less power than Bitcoin

Ethereum is estimated at 29 kWh/transaction
29 kWh / 0.0355 kWh = 817
So NEM at the moment uses per transaction 817 time less power than Ethereum


#9

Thank you meyns for this insightful article, it is a very topical discussion at the moment!


#10

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#11

Here is an update on the usage of XEM/Bitcoin/Ethereum:

(According to http://nemermind.be/dtransactions.html)
The average transactions of NEM in the last 7 days is:
(3234+2675+1908+2079+1924+1903+1887)/7 = 2230 tpd
568 nodes on line at the moment
0.025 kW x 568 nodes x 24h = 340.8 kWh/day
340.8 kWh/day / 2230 tpd = 0.153 kWh/transaction

(According to https://digiconomist.net/bitcoin-energy-consumption)
Bitcoin is estimated at 272 kWh/transaction
888 kWh / 0.153 kWh = 5804
So NEM at the moment uses per transaction 5804 times less power than Bitcoin

(According to https://digiconomist.net/ethereum-energy-consumption)
Ethereum is estimated at 72 kWh/transaction
72 kWh / 0.153 kWh = 470
So NEM at the moment uses per transaction 470 times less power than Ethereum