Recent research made by Panda Analytics shows staggering facts that confirm that mining gold is far more expensive than mining bitcoin.
Using the top-down and bottom-up approaches to assess electricity consumption by bitcoin miners and players in the gold mining industry, investor Vladimir Jelivasic of Panda Analytics estimated that the first consumes about 4.344 megawatt-hours ($4.3 billion) annually, and the second – 92 million barrels of oil in the form of diesel fuel ($6 billion).
Good to see this piece generating a lot of debate. Bitcoin uses a lot of energy, but not nearly as much as physical gold mining https://t.co/E9biEYbZ8Y by @VladimirVjel cc @nathanielpopper @NeerajKA @galka_max
— LongHash (@longhashdata) September 14, 2018
Given that the world’s oil consumption is 34 billion barrels per year, the gold mining industry consumes 0.27% of this volume. The production of bitcoin annually accounts for only 0.07% of the electricity consumed by the world.
Jelivasic is also convinced that comparing the energy consumption of bitcoin and countries such as Ecuador does not make any sense since the first cryptocurrency has nothing to do with the characteristics of states. In this context, in his opinion, it is expedient to compare digital gold and gold.
According to the report of Barrick Gold Corporation from last year, extraction of one ounce of gold cost about $794. Each year, an average of about 88 billion ounces is produced, which leads to a figure of $70 billion.
Nevertheless, Barrick in development is one of the most budgetary fields in the world. Assuming that the cost of production in the world is 25% higher on average, the global production costs are $87.3 billion, which is 20 times more than the costs applied for bitcoin.