Critics often point out that Bitcoin mining is an energy-intensive process. However, compared to gold mining that uses more than twenty times the energy, Bitcoin mining is not that much of an environment killer.
Sourcing raw precious metals from the ground is a highly intensive process regarding resources, labor, time, and the money needed. Heavy machinery is necessary to dig up soil, wash the mud and rocks, and filter out the gold. The world’s annual gold production costs $87.3 billion. The statistic is based on a 2017 report that does not give a transparent overview of the overall energy usage.
Assuming that those figures hold up, it paints an alarming picture. Diesel fuel is an essential part of gold mining worldwide. According to analysts, almost 100 million barrels of crude oil fuel the industry each year. Bitcoin mining also uses oil insomuch as most power plants worldwide are still powered by fossil fuels such as oil, natural gas, and coal.
The overall electricity consumption for the whole Bitcoin network this year is estimated to reach more than 73 TWh. It works out to a total of only over 42 million barrels of crude oil given the present conversion rate of 1 TWh = 588,440.75 barrels of crude oil. Supposing that all the necessary energy is oil-generated, Bitcoin mining still uses less than half of the crude oil amount than gold mining.
It does not mean that the gold mining sector has to minimize its energy consumption. In fact, it looks impossible to do such under present circumstances. It will only make the scarce precious metal harder to find and dig up. As such, its overall energy usage and associated costs will constantly rise over time.
Recent Bitcoin mining reports indicate that its energy consumption is very high. In fact, it is almost equal to 70% of the overall electricity output of Ecuador. Bitcoin mining consumes 0.07% of the worldwide electricity capacity. It adds up to a total yearly cost of $4.3 billion, which is less than one-twentieth of gold mining.
Meanwhile, gold mining uses 0.27% of international oil production. It seems to have more troublesome side effects considering that oil is a fossil fuel and is harmful to the climate. However, it is hardly ever mentioned as people seem to be more focused on the drawbacks of Bitcoin mining.
Bitcoin mining is more efficient than gold mining. It is hard to predict until when this correlation will favor digital currencies. The interest in Bitcoin is increasing. New mining operations are launched in regions with abundant renewable energy sources. With that, the overall electricity consumption will increase accordingly. Scarcity drives energy usage to a different level for both Bitcoin and gold alike.