According to a new study, the traditional banking system uses twice as much energy compared to mining .
See also: Bitcoin: Its price drops after Tesla suspects it is selling it
Gold mining also uses up to twice the amount of energy as that needed to mine bitcoin, says the report, which was published by cryptocurrency investment firm Galaxy Digital.
The study was carried out by the Galaxy Digital Mining group, following the controversy sparked by Elon Musk's comment about the energy consumption of bitcoin mining and his announcement that Tesla would no longer accept the cryptocurrency as payment for its electric vehicles.
Former hedge-fund manager Mike Novogratzis the CEO of Galaxy Digital, which made all of its calculations public.
The authors of the study estimate that the total energy consumption of the entire bitcoin network is 113.89 terawatt-hours, of which 99% comes from mining computers.
Bitcoin mining is the process of solving complex mathematical puzzles to verify bitcoin transactions and record them in blockchain blocks.
See also: Elon Musk: What experts think about his Bitcoin decision
This figure is lower than the Centre for Alternative Finance , which estimated 128 terawatts per hour in March 2021.
CAF has estimated that the bitcoin industry as a whole now uses as much energy each year as a country the size of Malaysia.
The Galaxy Digital study claims that according to its calculations, the energy consumption of bitcoin is less than half that of the traditional banking system, which is estimated at 263,72 terawatts per hour and gold mining at 240,61 terawatts per hour.
The study admitted that “calculating the energy use of these two industries is not as easy as auditing bitcoin” and stated that their study was a “good attempt at estimating the energy footprint of both the gold industry and the banking system.”
The study stated that “the banking industry does not directly report electricity consumption data.”
And it reports that it made the banking calculation based on estimates of energy use from bank data centers, bank branches, ATMs and card network data centers.
See also: Tesla: Why is it stopping accepting Bitcoin as payment for its vehicles?
To calculate the gold industry's energy consumption, Galaxy Digital Mining says it used estimates of the industry's total greenhouse gas emissions provided in the World Gold Council's report "Gold and Climate Change: Current and Future Impacts."
The critics on social media quickly showed that both the gold mining industry and banking businesses are significantly larger than bitcoin, but they use only double the energy according to the study.
Galaxy Digital responded to this criticism by saying that bitcoin's energy consumption is not linked to the «volume of transactions or its performance».
