NEM vs Bitcoin: Cost of maintaining the network
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).
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/
This 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) securing the network. This means that vastly more nodes are securing the NEM network than the Bitcoin network (even at this moment), infact this means much more decentralisation and security in the NEM network.
I will do all calculations with an average cost of 0.10 $/kWh.
Bitcoin works with POW, as a result 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).
NEM works with POI, under those circumstances the harvesting is based on the amount of coins in the wallet and the transaction of that wallet in the network. Notably it also works with delegated harvesting meaning 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)
If we calculate per node:
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.
Comparing NEM to Bitcoin:
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:
Ultimately this 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.