There aren’t many sureties in life, but some things are certain. Day after night and Elon Musk tweeting something about cryptocurrencies. At least these days, till something else comes along to take over our collective obsession. The tweet that Musk shared a few days ago about the environmental footprint of cryptocurrencies including Bitcoin, is still ringing in the ears of many. The latest numbers may indicate otherwise though, while drawing a pretty damning comparison while at it. Financial services and investment management firm Galaxy Digital has released some Bitcoin energy consumption numbers and these indicate that the traditional banking systems as well as Gold mining consume as much as twice the energy that Bitcoin requires. Banking systems use power for physical branches, data centres, ATMs and digital payment networks.
The numbers by Galaxy Digital (Read report here) peg the annual electricity consumption of the Bitcoin network at 113.89 terawatts per hour per year (TWh/year). In comparison, the numbers by the University of Cambridge and the International Energy Agency, which we had reported earlier, peg the Bitcoin network consumption at 151.16 TWh as on May 13 this year. There are further numbers to claim Bitcoin isn’t as resource intensive as it is made out to be. The data indicates that the global annual electricity generation is around 26,730.07 TWh/yr which is 234.7 times that of what Bitcoin networks consume, and that the global energy supply is 166,071 TWh/yr which is 1,458.2 times that of that the Bitcoin networks use. Most of the energy used by Bitcoin is from computing devices that are mining the currency. In comparison, the banking systems consume 263.72 TWh/yr of power while gold mining consumes around 240.61 TWh/yr.
For a traditional banking system, the use of data centres, operating bank branches and running digital payments networks including card systems and ATMs consume maximum power in the chain. Card networks would also include systems run by the likes of Mastercard, Visa and American Express, to name a few, globally. Mike Novogratz, CEO of Galaxy Investment Partners, believes there are a group of people who believe no amount of energy consumption is justified because they believe Bitcoin has no value. He goes on to point out in the report that of the 26,730.07 TWh/yr electricity that is produced, there are transmission losses as high as 2,205.23 TWh/yr—and that’s according to the data confirmed by International Energy Agency (IEA). This loss is 19.36 times of what Bitcoin’s energy consumption is, over the year. Cryptocurrency, including Bitcoin, Ethereum, Litecoin, Dogecoin and others have been under the spotlight for the energy that is required to mine these digital coins, and the impact on the environment.