If the market price of bitcoin doesn’t make your jaw drop, its energy expenditure will. Bitcoin consumes an astounding 1 percent of the global energy supply. But before you dim the screen on your laptop to keep the oceans from boiling away, let’s put this number into perspective.
Bitcoin’s environmental impact is dramatically less than the traditional “currency of choice” for economic liberty fans (that’s gold if you hadn’t guessed). So let’s look a little closer at why gold mining inflicts more damage to the environment than bitcoin:
(1) Gold Mining Requires More Energy Dollar-for-Dollar
Bitcoin and gold are similar because — unlike fiat currencies — no centralized government can dilute them by minting more for free. However each time a new bitcoin — or a new gold coin — enters the marketplace, extensive energy was expended to make that happen.
Compared to bitcoin, however, the energy expenditure required to mine gold is higher. The bitcoin network’s global power consumption is an estimated 22 terawatt-hours per year — approximately the same amount as the nation of Ireland. Meanwhile, gold-mining operations expend 132 terawatt-hours per year. That’s a little closer to Poland.
Based on energy expenditure alone, it’s clear that gold mining inflicts greater wounds upon the planet. But what about other forms of environmental impact, like toxic waste dumping and landscape destruction?
(2) Gold Mining Damages the Environment in Ways that Bitcoin Never Will
Gold extraction devastates the physical environment beyond energy expenditure. As a completely digital “thing,” bitcoin won’t hurt the environment like this. Here’s how gold mining hurts the Earth:
⦿ Toxic waste: Did you know that large gold-mining companies produce 20 tons worth of toxic waste to create a single gold ring? Even more frightening is the Papua New Guinea gold mining operation that is seeking approval to dump approximately 13 million tons of toxic gold mining waste into the ocean for the next 28 years.
According to this study:
Metallurgical extraction breaks the crystallographic bonds in the ore mineral in order to recover the desired element or compound . Large quantities of waste are produced during this activity. particularly in gold mines which release over 99% of extracted ore as waste to the environment .
⦿ Landscape destruction: Open-pit gold mining destroys beautiful landscapes and wildlife habitats throughout the world. Unfortunately, these habitats will never be the same.
⦿ Acid mine drainage: The exposure of rocks and minerals found in goldmines seeps deadly sulfuric acid into surrounding environments. Arsenic, lead, cadmium and iron also leach into natural habitats endangering the lives of people and wildlife.
⦿ Mercury production: Small-scale gold-mining operations use mercury to separate gold from sediment. This has caused a global health crisis, particularly in developing nations.
⦿ Destruction of the Amazon: Small-scale gold miners are bulldozing swaths of the Amazon rainforest to mine the rich gold deposits. Experts say that gold mining has caused a six-fold increase in deforestation in certain parts of the Peruvian Amazon.
(3) Transporting Gold Expends Even More Energy
Bitcoin is also easier to transport compared to gold. Anyone can transfer a billion dollars worth of bitcoin across the world in an instant — at a price and energy expense of virtually zero. In contrast, as soon as you need to make a long-distance, billion-dollar payment in gold, the tremendous energy required to transport the precious metal is readily apparent.
Can We Make Bitcoin More Earth-Friendly?
At the end of the day, bitcoin is better for the environment than gold. However, bitcoin is far from perfect due to the massive amount of energy required to maintain its network.
Considering that bitcoin is a potential “gold alternative” for economic freedom-lovers, perhaps we should start exploring new ways to mine bitcoin with green, renewable sources of energy — like biomass, wind, solar and hydroelectric power.