Is the Banking and Gold Sector a Bigger Threat to the Environment than Bitcoin?

traditional economy damages ecology more than blockchain

Galaxy Digital’s published report shows that the Banking and Gold Industry consumes considerably greater energy than Bitcoin.

Bitcoin’s Energy Comparison to Banks Labelled “Unfair”

There have been recent concerns raised about Bitcoin’s energy usage, and the environmental problems it might cause. 

Discussions about the environmental threats posed by the leading cryptocurrency  came to a head last week following Elon Musk’s announcement that Tesla would be rejecting payments with the leading cryptocurrency due to “environmental concerns.”

The report published by Galaxy Digital, however, brings Tesla’s stance into question. Galaxy Digital, founded by the Wall Street legend Mike Novogratz, strives to “bridge the gap between crypto institutional worlds”. Galaxy Digital analysts employed certain estimations to discover how much energy the Bitcoin network uses and how it compares to the numbers posted by the Banking and Gold industry. The latter part, of course, is a major talking point in the report: the Banking sector and the Gold Industry do not exactly have numbers

Bitcoin energy-consumption statistics have been made available for years, and calculated annually without a compulsion to do so. This is one effort Galaxy Digital’s analysts soundly praised in the report, especially considering other traditional institutions, like the banking system and the gold industry, do not display such transparency.

By Galaxy Digital’s computation, the yearly power utilization of Bitcoin is assessed to be 113.89 TWh/yr. A significant usage, Galaxy Digital acknowledges. For an easier reference, the energy use of “always-on” devices in the United States is estimated to be 1,375 TWh/yr — a 1200% increase compared to Bitcoin’s.

The banking sector, however, does not exactly have an official carbon footprint, which makes fair comparisons not exactly legitimate. 

Unlike Bitcoin, while the banking sector and the gold industry is believed to consume a significant amount of energy, it does not report its energy use. 

This has not stopped Galaxy Digital’s analysts from making their estimation of course. According to its analysts, Gold-processing operations, including processes which directly emit greenhouse gases to operations like recycling, the gold industry is estimated to emit almost 1.5 million tC02 in a year, setting its energy usage per year at 240.61/yr. A figure more than twice Bitcoin’s usage. 

Also, using a rougher calculation of the banking sector, and taking banking data centers, bank branches, ATMs, and card network data centers into consideration, the banking industry’s energy consumption is estimated to be  238.92 TWh/year. Also more than twice Bitcoin’s numbers.

Galaxy Digital’s analysts agree Bitcoin’s energy use is high. If one considers, it is not yet globally accepted, one might argue that it does not offer much value compared to its yearly emissions. Regardless, Galaxy Digital concluded the leading cryptocurrency can help economically unstable countries, while restoring balance to wealth instability. 

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