According to Galaxy Digital researchers, the traditional banking system and the gold mining industry each separately consume twice as much electricity as the Bitcoin network.
Specialists of the mining division of Galaxy Digital, owned by Michael Novogratz, published a report “On Energy Consumption by Bitcoin Miners: A Quantitative Approach to a Subjective Question.” According to their estimates, the annual electricity consumption for bitcoin mining is 113.89 TWh. This includes the energy consumed by miners, pools and nodes. Bitcoin mining electricity consumption can be transparently tracked in real time using the Cambridge Bitcoin Electricity Consumption Index (CBECI).
With regard to the traditional financial system and gold mining, it is difficult to calculate accurate figures. The banking industry does not report electricity consumption data. In addition, retail and commercial banks will need to carry out tiered and multilateral settlements to calculate this indicator. According to Galaxy Digital, the annual electricity consumption of banking data centers, bank branches, ATMs and card processing systems is estimated at 263.72 TWh.
Galaxy Digital used data from the World Gold Council report Gold and Climate Change: Current and Future Impacts to calculate energy consumption in the gold mining industry. It turned out that gold mining consumes about 240.61 TWh per year. Moreover, this indicator may not take into account the intensity of carbon dioxide emissions into the atmosphere when using non-environmentally friendly tires on vehicles used in gold mines. High rolling resistance tires increase fuel consumption and carbon footprint.
Galaxy Digital experts decided to conduct such an analysis against the backdrop of a major collapse in the Bitcoin exchange rate. This is partly due to statements by the CEO of Tesla and SpaceX Elon Musk about the termination of accepting BTC as payment for the purchase of electric vehicles due to the bad impact of bitcoin on the environment.
Musk previously tweeted: “Cryptocurrency is a good idea, it has a promising future, but it can’t be that expensive for the environment.” The cryptocurrency community criticized Musk for such words, advising SpaceX to switch to more sustainable energy sources so as “not to look like a hypocrite.”
Galaxy Digital launched financial services for miners and started mining from the beginning of this year.
