Mining: Bitcoins 15 times as climate-damaging as gold
News Arnulf Hinkel, Financial Journalist – 05.04.2022
Cryptos and gold are often mentioned by investors in the same breath, since, among other similarities, both asset classes are obtained through a complex and expensive mining procedure. Even though they have completely different functions in the investor’s portfolio, they share one central characteristic: complete independence from existing financial systems. The growing demand and thus also the mining of Bitcoin & Co are drawing increasing attention to a problem that has thus far received little.
Bitcoin carbon footprint much higher than that of gold
The precious metal has always had the reputation of being very harmful to the climate in its production, which has led to the introduction of much more environmentally friendly mining technologies and an increased focus on gold recycling, e.g. from e-waste and old smartphones, especially in recent decades. The carbon footprint from the production of an amount of gold equal to the value of one Bitcoin releases 13 tonnes of CO2. By contrast, the production of a single bitcoin releases 191 tonnes. This data from a recent study was published at the end of March 2022 on the information portal “Bankless Times”, which focuses on cryptocurrencies.
Production of bitcoins nearly 3.5 times more expensive than gold
According to “Bankless Times” author Elizabeth Kerr, the production costs of cryptos are also significantly higher than those of gold: while Bitcoin mining consumes 17 megajoules of energy to reflect the value of one US dollar, the same value in gold consumes only 5 megajoules.
This comparison does not take into account the environmental impact of developing and operating gold mines. On the other hand, the environmental and climate impact of the mass production of electronic waste as a result of the growing demand for cryptos and the resulting increase in computer consumption for crypto-mining are also considerable and should be taken into account.