Mining gold consumes 20 times more energy compared to mining “Bitcoin”
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Answer Mining gold consumes 20 times more energy compared to mining “Bitcoin”
A recent report indicated that each year more than $87.3 billion is spent on gold mining. In contrast, less than $4.3 billion is used to mine Bitcoin (the cryptocurrency).
Essentially, gold mining requires 20 times the energy and cost of bitcoin mining, despite the popular claim since the bitcoin rally in early 2017 that bitcoin significantly impacts the environment negatively.
The value of gold or the value of bitcoin?
Currently, the foreign exchange market is worth $200 billion, while the entire market value of gold is estimated at $8 trillion. Given the huge disparity in the total value between the two markets, analysts can argue that the significant energy cost of mining gold can be justified in comparison to Bitcoin mining and its energy consumption.Read:The highly anticipated Ethereum upgrade may arrive later in June 2022
However, this assumes that the sole purpose of Bitcoin mining is to expand the supply of the dominant cryptocurrency to ensure there is enough of it to trade and meet the growing demand for the asset.
With Bitcoin and all other demo transactions in the market, mining is involved in the settlement of transactions. Which means that if a mining coin is compared to the process of mining gold, it will be more difficult to compare the cost of mining bitcoin and the combined cost needed to mine gold and transport gold.
Aside from the London Gold Market (LBMA), the largest, no market for gold and silver, and the clearing partners of HSBC, ICBC, Standard Bank, JPMorgan, Scotiabank and UBS, there are many clearing houses and gold brokerages that oversee On the transfer of the traditional store of value.
Therefore, if the cost of energy used to extract gold and clear homes and agencies involved in transporting gold to foreign markets are combined, a comparison of the energy used for Bitcoin and the energy required for gold will show a significant difference.
The argument against energy use for bitcoin mining also fails given the rapid adoption rate of renewable energy sources. In some regions, such as Chile and southwestern China, the provision of clean or renewable energy is so abundant that it is freely offered to households and businesses.Read:Margin trading costs a trading platform manager to lose $80 million in client funds
It is clear that most mining centers currently rely on non-renewable energy sources for mining, as they are cheaper. However, Bitcoin’s energy use is not limited to the dominant cryptocurrency only. Rather, the same argument can be applied against gold, silver, and any other form of money that is currently available.Read:The BNB digital currency continues to shine in performance…Learn the reasons behind its high price
The real problem is with energy
As John Lilich, a member of the ConsenSys Center for Ethereum blockchain development, said, the unit cost per transaction in mining is higher than in banks and legacy systems. However, as the industry moves towards power optimization systems, mining power consumption will continue to be not the issue, especially when it comes to Ethereum.
“The real question is whether the overall costs of crypto (mining) energy inefficiencies are worth the benefits such as custody of the assets. And my claim is yes! It’s worth it, Lilich said, but only if our priority is to continue working towards an energy-efficiency development such as Proof of Stakes (PoS), a type of algorithm through which the crypto blockchain network aims to achieve distributed consensus.
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