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Bitcoin Mining Nearly 3.5 times More Expensive than Gold Mining

Bitcoin Mining Nearly 3.5 times More Expensive than Gold Mining

Last updated 23rd Sep 2022
Disclosure
  • Bitcoin and gold have become the preferred options for most investors
  • Generating Bitcoin worth $1 uses up 17 megajoules (MJ) of energy

Bitcoin and gold have become the preferred options for investors, following the volatile markets arising from the pandemic. However, concerns over the impact of Bitcoin mining keep rising, amid its increased usage.

BanklessTimes has been following up on how much it costs to mine the two safe assets. According to our findings, generating Bitcoin worth $1 uses up to 17 megajoules (MJ) of energy. Mining gold worth the same amount would require 5 MJ, which is 3.4 times less.

Increased Bitcoin usage led to more carbon emissions

Bitcoin, and other cryptocurrencies, are designed in such a way that increased adoption leads to the coin’s increase in value. Consequently, more energy is required to mine the cryptocurrencies as more people get on board, which consequently translates to an increase in the carbon emissions.

The last two years have seen an increase in the usage of Bitcoin and gold, which also directly translates to the adverse effects on the environment. Although both assets consume quite a bit of energy, Bitcoin’s consumption is comparably higher since the network still needs electricity to complete transactions and continue functioning.

Following the surge in the number of users, Bitcoin’s carbon footprint is currently about 15x that of gold. Mining 1 Bitcoin emits about 191 tonnes of carbon dioxide, while mining gold worth one bitcoin emits about only 13 tonnes.

To put things into perspective, the carbon emissions from 1 bitcoin is equivalent to over 1.6 million VISA transactions.

Can Bitcoin mining go green?

The effects of Bitcoin mining to the environment have raised concerns among environmentalists for quite some time now. For this reason, stakeholders have been looking for alternatives to clean Bitcoin mining, with special focus on renewable energy.

Research in the crypto space reveals the need for more sustainable solutions, especially seeing as almost everyone in the financial space seems to agree that digital currencies hold the future of finance.

However, efforts to make Bitcoin mining green aren’t too fruitful at the moment. Data shows that Bitcoin mining has become less green following China’s recent ban on crypto last August. Before the ban, miners in China would use hydropower to mine Bitcoins, especially during the wet season. This helped a great deal with keeping BItcoin mining green.

Elizabeth Kerr

Elizabeth Kerr

Elizabeth is a financial content specialist from Manchester. Her specialities include cryptocurrency, data analysis and financial regulation.