Galaxy Digital released a report detailing how Bitcoin consumes less energy than traditional finance industries and the value it can bring. The analysis used several calculations to determine how much energy the Bitcoin network uses compared to the banking and gold industries.
In the opening section, the authors point out that criticisms of energy use do not generally apply to traditional industries. While Bitcoin is lauded for being transparent, established companies are not transparent and generally do not disclose their energy footprint.
Gold and Banking Systems
The authors acknowledge that the Bitcoin network consumes a lot of energy, but they also point out that this is exactly what secures the network and makes it so robust. According to Galaxy Digital’s calculation, Bitcoin’s annual electricity consumption is estimated at 113.89 TWh / year. From some point of view, the energy consumption of always-on devices in the US is 1,375 TWh / year – in other words, 12.1 times the Bitcoin consumption.
It is difficult to predict consumption by the gold and banking industries due to the lack of data on energy use. This is about Bitcoin’s energy use “In the right way” makes it difficult to speak.
For the gold industry, analysts studied all processes involved, including those that directly emit greenhouse gases, those that emit indirectly, and emissions from treatment and recycling. By multiplying a total of 100,408,508 tCo2 in emissions by the global IEA carbon intensity multiplier, they estimated that the gold industry’s total energy consumption could be 240.61 TWh / year.
The report states that the banking sector is more difficult to measure as it does not directly report electricity consumption data. However, it includes banking data centers, bank branches, ATMs and card network data centers in the system. With this rough classification of power consumption sources, it estimates the energy consumption of the banking sector at 238.92 TWh / year. This corresponds to 2.3 times Bitcoin’s.
Bitcoin’s Energy Consumption Narrative
The report follows Tesla’s decision to stop accepting BTC for payments due to concerns about energy use. Bitcoin’s energy consumption has been a topic of discussion for years, but only recently has it become a hot topic.
However, the real argument that supports Bitcoin’s energy consumption is that the value it brings can justify it to some extent. Galaxy Digital notes that value is subjective and the mainstream public is still undecided about Bitcoin’s usefulness.