+ 2.69
+ 1.88%

Take That, Elon: Banks Consume Much More Energy That Cryptocurrency Mining, Report Shows

May 17, 2021 12:13 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Take That, Elon: Banks Consume Much More Energy That Cryptocurrency Mining, Report Shows

Recent research suggests that the traditional financial system consumes much more energy than Bitcoin (CRYPTO: BTC) does.

What Happened: According to a report by cryptocurrency bank Galaxy Digital, Bitcoin consumes 114 TWh of electrical energy per year, while the banking industry consumes over 260 TWh.

According to the study, Bitcoin uses 113.89 TWh, including the energy consumed by miners, mining service infrastructure, and network node power consumption.

Galaxy Digital points out that "the banking industry does not directly report electricity consumption," so estimating it was much harder than that of Bitcoin's, which is transparent and easy to track in real-time, using tools like the Cambridge Bitcoin Electricity Consumption Index.

                                                Galaxy Digital Report

The traditional financial system uses multiple layers of settlements — unlike Bitcoin, which features final settlement — and Galaxy Digital estimates that banking data centers, bank branches, ATMs, and card network data centers use about 263.72 TWh globally.

This is 131.5% more than Bitcoin's estimated yearly consumption of 113.89 TWh.

The report was published after a tech tycoon and CEO of electric car manufacturer Tesla Inc (NASDAQ:TSLA), Elon Musk, announced that the company would stop accepting Bitcoin as means of payment due to environmental concerns.

The automaker implemented Bitcoin as a payment option in March after it had bought $1.5 billion worth of the cryptocurrency in February. 

“Cryptocurrency is a good idea on many levels and we believe it has a prominent future, but this cannot come at great cost to the environment," Musk wrote in a recent tweet.

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

Elon Musk Counters Kraken CEO On Bitcoin Being 'Greener' Than Critics Say

What Happened: Jesse Powell, CEO of crypto exchange Kraken, thinks Elon Musk has more to learn on the topic of Bitcoin mining. read more

Will Tesla Resume Bitcoin Transactions Now That Miners Clean Energy Usage Exceeds 50% In China?

What Happened: Over the weekend, crypto markets rallied after Elon Musk tweeted that Tesla Inc (NASDAQ: TSLA) would resum read more

Now Is The Right Time For New Investors To Buy Bitcoin, Says Pantera CEO

Pantera Capital CEO Dan Morehead took to Twitter on Wednesday to make the point that the Bitcoin (BTC) market was below trend and “it’s best time to buy” for new investors. read more

This Crypto Startup Aims To Become 'The Greenest Blockchain' To Fight Rising Environmental Concerns

Algorand (CRYPTO: ALGO) is focusing on its green credentials and hoping to attract the attention of environmentally-conscious companies, such as Elon Musk's electric car manufacturer Tesla Inc. (NASDAQ: TSLA). read more