Galaxy Digital: Bitcoin Consumes Less Energy Than Banking and Gold

Share Article
In Brief
  • Bitcoin consumes less energy than gold, banks, and other financial systems.

  • This was revealed in a report released by Galaxy Digital.

  • Usage by the banking industry is harder to gauge as it does not directly report electricity consumption data.

  • promo

    Claim a $200 reward with 3 simple steps — only on Bybit!

The Trust Project is an international consortium of news organizations building standards of transparency.

Galaxy Digital has released a report on Bitcoin energy consumption, detailing how it consumes less than traditional financial industries and the value it can bring.

Sponsored





Sponsored

The analysis uses several calculations to ascertain how much energy the Bitcoin network uses and how it stacks up against the banking and gold industries.

In the opening section, the authors note that the energy usage criticisms are not usually applied to traditional industries. It lauds Bitcoin (a carbon footprint that’s been compared to Las Vegas) for being transparent, while incumbent companies are opaque and don’t often disclose their energy footprint.

Sponsored



Sponsored

Gold and banking systems

The authors accept that the Bitcoin network consumes a great deal of energy, but assert that this is exactly what secures the network and makes it so robust. By Galaxy Digital’s calculation, the annual electricity consumption of Bitcoin is estimated to be 113.89 TWh/yr. For some perspective, the energy consumption of always-on devices in the US is 1,375 TWh/yr — 12.1 times that of Bitcoin’s consumption.

The consumption of the gold and banking industries are hard to estimate because of a lack of data on energy usage. This makes it difficult to “have an honest conversation” about Bitcoin’s energy use.

For the gold industry, the analysts took a look at all of the processes involved, including those directly emitting greenhouse gasses, those indirectly emitting them, and emissions stemming from refinement and recycling. Multiplying the total 100,408,508 tCo2 in emissions with the global IEA carbon intensity multiplier, it estimates the total energy consumption of the gold industry to be 240.61 TWh/yr.

The report describes the banking industry as being harder to gauge because it does not directly report electricity consumption data. However, it takes banking data centers, bank branches, ATMs, and card network data centers. With this rough categorization of sources of power consumption, the banking industry’s energy consumption estimate is 238.92 TWh/year — 2.3 times that of Bitcoin.

Narrative now centering on Bitcoin’s energy usage

The report follows Tesla’s decision to stop accepting BTC for payments out of concerns for its energy usage. Bitcoin’s energy consumption has been a narrative thread for years, but only with recent headlines has it become a prominent one.

However, the real argument supporting Bitcoin’s energy consumption is that the value it brings can justify it to some degree. Galaxy Digital notes that value is subjective and that the mainstream public is still on the fence about Bitcoin’s utility.

Galaxy Digital’s report considers the arguments posed by detractors, those who see it as complementary to incumbent systems, and ardent supporters. To detractors, it says that Bitcoin can bring financial inclusion and families in economically and politically unstable countries.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Rahul's cryptocurrency journey first began in 2014. With a postgraduate degree in finance, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has guided a number of startups to navigate the complex digital marketing and media outreach landscapes. His work has even influenced distinguished cryptocurrency exchanges and DeFi platforms worth millions of dollars.

Follow Author

$200 reward waiting for you — Deposit, Trade, Follow and Claim today!

Discover

Limited offer! Learn to mine and trade crypto today for free

Go