Amid ongoing concerns about Bitcoin (BTC) power consumptionA new study claims that the traditional banking system uses a lot more energy than the Bitcoin network.
Michael Novogratz ‘cryptocurrency company, Galaxy Digital, released on Friday a report entitled “On Bitcoin’s Energy Consumption: A Quantitative Approach to a Subjective Question,” which gives access to its methodology and calculations.
Manufactured by the Galaxy Mining Branch, The study estimates that Bitcoin’s annual electricity consumption is 113.89 terawatt hours, including energy for miners ‘needs, miners’ energy consumption, pool energy consumption, and nodes energy consumption. This amount is at least twice the total energy consumption of the banking system and the gold industry. annually according to Galaxy estimates.
Although Bitcoin’s energy consumption is transparent and easy to track in real time using tools like the Cambridge Bitcoin Electricity Consumption Index, Estimating the energy consumption of the gold industry and the traditional financial system is not that easyexplained Galaxy Digital Mining.
“The banking sector does not report electricity usage data directly,” the report saidThe private and commercial banking system requires multiple tiers of settlement, while Bitcoin provides final settlement. Taking into account Galaxy estimates of energy consumption in bank data centers, bank branches, ATMs, and card network data centers The total annual energy consumption of the banking system is estimated at 263.72 TWh worldwide.TO
To calculate the energy use of the gold industry, Galaxy Digital Mining used estimates of the industry’s total greenhouse gas emissions as reported in the World Gold Council’s report entitled “Gold and Climate Change: Current and Future Impacts”.. According to the study’s estimates The gold industry consumes approximately 240.61 TWh per year. “These estimates can exclude major energy sources and emissions that are second-order effects of the gold industry, such as the energy and carbon intensity of tires used in gold mines,” noted Galaxy.
Galaxy Digital’s analysis of Bitcoin’s energy use comes amid a major cryptocurrency market crash that follows Tesla CEO Elon Musk’s decision to no longer accept BTC as a means of payment for car purchases for environmental reasons. “Cryptocurrency is a good idea on many levels and we believe it has a bright future, but this cannot result in high costs for the environment,” the CEO wrote on Twitter last week.
Musk’s move sparked huge criticism in the cryptocurrency community;; Some argued that SpaceX would need to switch its rockets to “more sustainable energy” in order not to “sound like some big unsuspecting hypocrite.”
Cryptocurrency markets fell over $ 500 billion after Musk hit Twitter with its announcement. Bitcoin today fell below $ 43,000 for the first time since early February. The executive apparently added more tension to the market by pointing this out Tesla has plans to remove Bitcoin from its balance sheet soon.