According to LongHash, more than 87.3 billion is spent each year on gold mining, and less than 4.3 billion is used for bitcoin mining.
In fact, gold mining requires 20 times more energy and costs than bitcoin, despite the fact that many analysts talked about a possible ecological catastrophe, which is connected with the mining of digital gold.
Capitalization of bitcoins and gold
Currently, the capitalization of the crypto-currency market is 200 billion, and the total market capitalization of gold is estimated at about 8 trillion. Given the huge price difference between the two markets, analysts can argue that the high cost of energy needed to extract gold can be justified.
However, it is assumed that the sole purpose of BTC production is to increase the supply of dominant crypto currency to ensure sufficient BTC in circulation to meet the growing demand for this asset.
In addition to the London ingot market (LBMA), the largest wholesale OTC market for gold and silver trading, as well as its clearing partners HSBC, ICBC Standard Bank, JPMorgan, Scotiabank and UBS, there are many clearing and gold-exchange agencies that control the transfer of traditional value storage.
Therefore, if we combine the cost of energy used to extract gold, as well as clearing chambers and agencies to transfer gold physically to foreign markets, then in direct comparison, the gap between the cost of gold and bitcoin will be even more significant.
The argument against using energy for mining of digital gold also does not take into account the speed of rapid introduction of renewable energy sources. In some regions, such as Chile and Southwest China, the supply of clean or renewable energy is so numerous that a huge portion is supplied not only for private use, but also for commercial enterprises.