The next time someone complains about electricity consumption on the bitcoin network, mention that banking, gold mining, gold recycling, and paper currency all use significantly more energy.
Canadian crypto analyst A v B (@ArminVanBitcoin) tweeted a comparison of the annual economic costs of different industries, including bitcoin mining, gold mining, and the global banking system.
Annual Economic Costs:
Gold Mining: $105B
Banking ( Electricity ): $63.8B
Gold Recycling: $40B
Paper Currency: $28B
Bitcoin: $0.79B 👈😱
— A v B ⚡ (@ArminVanBitcoin) June 8, 2018
A v B revealed that the annual economic costs of bitcoin are significantly lower than the annual economic costs of other crypto-related activities, including global banking, gold mining, and paper currencies. Specifically, bitcoin costs 500 times less per year than the global banking industry and 30 times less than gold mining.
We hear a lot about the wastefulness of the bitcoin network. People inside and outside the industry will convince you that bitcoin is unsustainable because it uses too much electricity. Thanks to this latest comparison, it’s easy to see that bitcoin isn’t nearly as wasteful as other major industries – at least in terms of annual economic costs.
A v B revealed how bitcoin’s energy consumption compares to other major industries:
- Banking: $1,8709 billion USD
- Gold Mining: $105 billion
- Banking (Electricity Consumption): $63.8 billion
- Gold Recycling: $40 billion
- Paper Currency: $28 billion
- Bitcoin: $0.79 billion
A v B summed up his findings by arguing, “Let’s never talk about #bitcoin energy consumption again. Thanks!”
In a follow-up tweet, A v B clarified that he was using information about the bitcoin network’s electricity consumption in 2014. In 2014, the bitcoin network was using $0.79 billion worth of resources per year. In 2018, that number has risen significantly. The bitcoin network today consumes $3.5 billion per year. Based on the $3.5 billion per year figure, bitcoin costs 500 times less than the global banking industry and 30 times less than gold mining.
A v B was citing information from Digiconomist.net, including their Bitcoin Energy Consumption Index.
According to that index, the bitcoin network is currently consuming 70.69 TWh of electricity per year – approximately the same amount of energy used by the entire country of Chile on an annual basis.
That may sound like a lot of electricity. However, as argued by A v B, bitcoin pales in comparison to other currency-related activities, including banking, gold mining, paper currency, and gold recycling.
The figures above refer to the total annual economic costs of each industry, including electricity usage and other costs. A v B also broke the issue further down into energy used and tonnes of carbon dioxide produced:
- Gold Mining: 475 million GJ of energy used per year, 54 million tonnes of CO2 produced
- Gold Recycling: 25 million GJ, 4 million tonnes
- Paper Currency and Minting: 39.6 million GJ, 6.7 million tonnes
- Banking System: 240 million GJ, 390 million tonnes
- Bitcoin Mining: 3.6 million GJ, 0.6 million tonnes
Obviously, based on these numbers, bitcoin has a long way to go before it catches up to other industries.
However, the numbers above are slightly misleading: the total market cap of bitcoin is significantly lower than the global banking industry and the global gold mining industry. If bitcoin grew to be as large as either global gold mining or global banking, then the numbers above would look significantly different.
In any case, you can view A v B’s tweet here.