According to research, banks and gold consume twice as much energy as Bitcoin
Environmental concerns prompted Elon Musk to back down on Tesla’s acceptance of Bitcoin. However, a recent report revealed that Bitcoin (BTC) consumes less energy than traditional financial industries.
The document was prepared by the consulting firm Galaxy Digital, which supports Bitcoin. In it, the company calculates the amount of energy used by the Bitcoin network and compares the results to those of the banking and gold sectors.
According to the report, the international banking system and the gold industry use more than twice the energy that the Bitcoin blockchain (BTC) needs to function.
Generally speaking, Bitcoin is often compared to gold as a value reserve asset. However, more recently, many questions have been raised regarding their energy consumption.
As Galaxy Digital estimated, banks and gold production activities demand about 500 terawatt-hours (TW/H) per year. This is the same amount of energy that Germany consumes in 12 months.
In the case of banks, the report estimated the amount of energy needed to keep the entire system running. That is, ATMs, branches, card issuers’ data centers and banking data centers.
In all, they estimated that the banking system demands 238.9 TW/H. This is equivalent to Spain’s annual energy consumption.
Gold production, which includes mining, milling and smelting, would consume around 240.6 TW/H per year. This is almost the same amount that Australia consumes annually.
For this calculation, the researchers considered other polluting emissions such as jewelry and use in electronic devices.
In the case of Bitcoin, the network’s energy consumption would be around 113.9 TW/H. As a comparison, the energy consumption of devices always connected in the United States is 1,375 TWh/year. Therefore, a consumption more than 12 times higher compared to BTC.
In this case, the use of energy in the mining companies, mining pools and nodes participating in the network was considered.
According to the report, criticisms of energy use generally do not apply to traditional industries, as its done with Bitcoin.
In the analysis, the authors also noted that it is easier to estimate – and criticize – the energy consumption of BTC given its transparency.
Finally, the report recognizes that the Bitcoin network consumes a large amount of energy. However, they point out that this is exactly what protects the network and makes it so robust.