According to a new study, the traditional banking system uses twice as much energy as mining Bitcoin.
Gold mining also uses up to twice as much energy as needed to mine bitcoin, says the report, published by cryptocurrency investment firm Galaxy Digital.
The study was conducted by the Galaxy Digital Mining team, following the controversy sparked by Elon Musk's comment on energy consumption during bitcoin mining and announced that Tesla would no longer accept the cold currency as payment for its electric vehicles.
The former director of the hedge-fund, Mike Novogratz, is the CEO of Galaxy Digital, who published all its calculations.
The authors of the study estimate that the power consumption of the entire bitcoin network is 113,89 terawatts per hour, 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 a blockchain.
This number is lower than Center for Alternative Finance of the University of Cambridge, which calculated 128 terawatts per hour in March 2021.
The 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, bitcoin energy consumption 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 acknowledged that "Calculating the energy usage of these two industries is not as easy as controlling bitcoinAnd stated that their study was a "good effort to assess the energy footprint of both the gold industry and the banking system».
The study stated that "the banking industry does not report data directly on electricity consumption».
And it states that it made its banking calculation based on estimates of energy use by banking data centers, bank branches, ATMs and card network data centers.
To calculate the energy consumption of the gold industry, Galaxy Digital Mining states that it has used estimates of the industry's total greenhouse gas emissions provided in the World Gold Council report entitled "Gold and climate change: Current and future implications».
Critics on social media have quickly shown that both the gold mining industry and banking companies are both significantly larger than bitcoin, but use only twice as much energy, according to the study.
Galaxy Digital responded to this criticism by saying that bitcoin energy consumption is not linked to "trading volume or performance".