Justice to Bitcoin Mining
One of the most popular arguments faced by Satoshi Nakomoto’s invention of Bitcoin is that the Bitcoin technology consumes more electricity than some countries. But according to LongHash bitcoin mining literally uses 20x less energy than gold mining.
According to LongHash, every year, more than $87.3 billion is spent on mining gold. In contrast, less than $4.3 billion is used to mine Bitcoin.
At press time, the current market cap for gold sits at around $7.8 trillion, while the market cap for Bitcoin is around $200 billion. This proves that gold market has a huge difference at par with Bitcoin marketing. But LongHush debates that this assumption aims at Bitcoin mining to enlarge its supply to meet demand.
When it comes to gold mining, it goes via a long step of inspections through various different clearing houses and brokerages before it is delivered to the consumers. With Bitcoin mining, transactions are secured that go peer-to-peer without any involvement of the third party.
Bitcoin process is quick and involvement of labor is less, and hence creates a huge difference between the energy and cost requirements of gold versus Bitcoin. Since gold’s cost reflects in diesel fuel and Bitcoins in electricity, which results in comparison that can be concluded as gold’s usage 0.27% of worldwide oil consumption versus Bitcoins use to 0.07% of worldwide electricity capacity, these figures for gold end up being about 20 times more than Bitcoin’s
As John Lilic, a member at Ethereum blockchain development studio ConsenSys said, the unit cost of each transaction in crypto is higher than banks and legacy systems. But, as the industry moves towards energy optimization systems, the energy consumption of crypto will continue to become a non-issue, especially when it comes to Ethereum.
“The real question is whether the gross energy inefficiency costs in crypto are worth the benefits like custody over assets. My contention is yes! It is worth it but only if our industry prioritizes & continues to work towards energy efficiency gains like Proof of Stake,” Lilic explained.