One of the most popular arguments against bitcoin technology is the argument that bitcoin mining consumes more electricity than some countries. However, a comparison by LongHash has revealed that bitcoin mining actually uses 20x less energy than gold mining.
According to LongHash, in a publication on its website on 13 September said the argument is baseless first of all because bitcoin energy consumption cannot be compared with that of a nation. Secondly, the figures are outrageous when compared with real estimates of energy consumption around the world.
In addition, it is almost impossible to measure energy consumption for a decentralized system like bitcoin with many independent nodes on the network. LongHash also argued that if the argument against bitcoin energy consumption will be fair, the energy consumption must be compared with something similar to it and used gold in this comparison since both are stores of value.
It mentioned Barrick Gold Corporation, the world’s largest gold mining company whose data was used to estimate annual energy consumption for gold mining.
According to the company’s 2017 annual report, it produced 5.3 million oz. of gold at the cost of $4.2 million in the year. With approximately 88 million oz. of gold produced yearly, it is estimated to cost about $70 billion annually to mine gold. This is significantly higher than the annual cost of bitcoin mining but no one considers it.
Comparing it to bitcoin based on hash rate calculations, LongHash estimated that the 3.45 million Antminer S9s required to support the blockchain only require 5,693 MWh to function optimally and a generous estimate of 7000MWh for older, less efficient hardware to support the blockchain.
If energy consumption is to be estimated based on block reward of miners however, each miner spends about $100 per MWh of electricity which adds up to a total of only 1,688 MWh of electricity to support the blockchain. The average energy consumption of bitcoin mining for the two approaches will therefore be 4,344MWh which translates to $4.3 billion annually.
In summary, gold mining uses 0.27% of the world’s oil while bitcoin uses only 0.07% of the world’s electricity. By the way with this figure, bitcoin uses only 70% of the 0.13% of world’s power Ecuador consumes.
These estimates clearly show that the problem of energy consumption by bitcoin mining being spread especially by mainstream media is exaggerated at best.
Besides, miners are looking for the most efficient means of mining using renewable energy to reduce the cost of mining in order for them to maximize profit so the cost of mining in the future will be even less than it is currently.
