2021-5-18 20:20 |
Galaxy Digital, a diversified financial services company that focuses on cryptocurrencies, has revealed that the banking system consumes more energy than BTC mining. The firm unveiled this news through a report entitled On Bitcoin’s Energy Consumption: A Quantitative Approach to a Subjective Question. Through this publication, the company sought to deduce whether the amount of electricity that the BTC network uses is an acceptable use of energy.
In the report, Galaxy Digital acknowledged that the Bitcoin network consumes a significant amount of energy. However, the firm believes that this energy consumption is what makes the network so robust and secure. While it is clear how much energy BTC uses in a year, its consumption is compared to the traditional banking system, when it comes to the coin’s use in payments, savings, and settlements. In cases where BTC is used as a non-sovereign store of value, its energy consumption is compared to that of gold.
However, the publication noted that it is vital to point out that both the banking system and the gold industry do not disclose their energy footprints. To determine whether BTC indeed uses a lot of energy, the report approximated the amount of energy consumed by the BTC network, the gold industry, and the traditional banking system. While Galaxy Digital found BTC uses 113.89 TWh/yr, the company’s approximations for gold and the banking system were 240.61 TWh/yr and 263.72 TWh/yr, respectively.
BTC’s energy consumption is acceptableAccording to Galaxy Digital, anyone across the globe can use BTC for transactions. This is because BTC transactions clear within an hour. Also, the network runs for 24 hours a day, all year round. To this end, the coin offers financial freedom to people in regions that lack access to a stable financial infrastructure. Galaxy Digital went on to say that the Bitcoin network can help improve the energy industry by creating perfect use cases for intermittent and excess energy. Additionally, the Bitcoin network will only scale further if adoption warrants it.
Seeing as BTC solves a massive problem for a significant fraction of the global population, Galaxy Digital said that its energy consumption is not necessarily a bad thing. The report’s authors claimed that human beings will continually come up with technologies that demand more power, and in turn challenge the status quo.
Answering the question of whether BTC’s energy consumption is acceptable, Galaxy Digital said,
Our answer is definitive: yes.
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