Gold has always been the most traded commodity for thousands of years. It has helped shaped history as empires and nations rise and fall. Although the global economy is closely tied to the gold standard for most of the 19th to the 20th century, most of the rich and developed countries have substantial gold reserves. The growth and emergence of bitcoins and other cryptocurrencies have become the digital alternative to gold in this day and age.
Although gold mining, just like in the times of the great Gold Rush, requires a lot of resources and manpower to convert ore materials into precious gold bars, bitcoin mining is surprisingly a costly endeavor as well. But figures have shown that gold mining is 23 times more energy-consuming than Bitcoin mining as statistics go beyond the ore to gold bar conversion since the cost also covers paper currency and minting, banking systems, and governments.
Figures have shown that gold mining costs around $105 billion/year and consumes around 131.94 billion kWh while bitcoin mining costs $4.50 billion/year and consumes 50.83 billion kWh. Although bitcoin operations are quite small compared to the massive gold mines around the world, bitcoin mining is more costly and power-hungry than gold mining on average. If you compare both mining operations to others, governments consume 1.62 trillion kWh at the cost of $27.6 trillion while banking systems consume 650 billion kWh at the cost of $1.87 trillion.
Further down the ecosystem associated with gold mining, gold recycling, as well as currency minting, consumes about 6.94 billion kWh at $40 billion.
Although there have been criticisms at bitcoin mining for its electricity consumption and the high costs involved in such operation, gold mining and all the associated operations are more costly than the former. However, there seems to be a bad impression on bitcoin mining as something illegal due as some governments view it as a disruptor to national economies. As a result, some countries have implemented tighter regulations on it even though gold mining, in general, creates more adverse environmental effects than bitcoin mining.
Mainstream media sometimes put a bad name on bitcoin mining by circulating stories on how much electricity bitcoin mining consumes with some even claiming that such activity gobble up 82% of all electricity production in the world. While some absurd stories even suggest that one bitcoin company used an old Soviet nuclear power plant to power up its operations. These stories have given the impression that bitcoin mining is an illicit, illegal operation.
Despite the negative publicity, some acknowledge that bitcoin mining is the future of exchange as it doesn’t require environmental exploitation. However, counting the environmental cost for it remains to be seen as calculations are not entirely clear.