One of the main arguments against Bitcoin is its negative impact on the environment. Indeed, mining is not the “greenest” activity, but how bad is it compared to other financial institutions of our time?

Mining and the environment

Mining, PoW, and therefore Bitcoin are often criticized for being environmentally unfriendly. Especially when there are PoS and other, much more “green” consensus algorithms that allow you to create cryptocurrencies without threatening the world with global warming.

But before blaming Bitcoin for all its sins, you should understand how bad it is for the environment. It is clear that if you take his indicators out of context, you won’t be able to say anything good about him. Yes, the energy consumption is colossal, and this is really not at all “eco-friendly” on the part of the first cryptocurrency.

But what do these mind-boggling numbers mean when compared to energy consumption in other areas?

Banks vs BTC

Paylesspower, a Texas-based energy company, conducted comparative study energy consumption of Bitcoin and the global banking system. And since high electricity consumption is the reason why Bitcoin is considered “dirty” for the environment, the researchers essentially compared the environmental footprint left by BTC and banks.

According to this analysis, it turned out that Bitcoin's energy consumption is 35.4% lower than that of the global banking system. The blockchain of the first cryptocurrency consumes approximately 167.14 TWh (terawatt-hour) of energy annually, while banking activities worldwide consume approximately 258.85 TWh of electricity per year.

If we take the figures provided by Paylesspower as a basis, it turns out that Bitcoin is losing the competition to traditional finance for the title of the main environmental threat. But still, before criticizing the banking infrastructure, let's look at how the researchers arrived at the above figures.

Research methodology

Alas, in such a politicized topic today as ecology, the results of any research, even those published in the most respected scientific journals, should be questioned. Therefore, for more unbiased conclusions, it is worth taking into account the methodology of the work performed. Paylesspower did not hide this information and described the path they took to get the final figures.

With Bitcoin, everything turned out to be quite simple: its energy consumption is of interest to many, so there are already quite a lot of studies on this subject that can be referred to. The final annual consumption figure was obtained based on Bitcoin Energy Consumption Index. Banks are much less transparent in this regard – there are many more different variables and at the same time it is more difficult to obtain accurate data for analysis.

Summary data

The study looked at different banking activities that involve significant energy waste, namely data centers, bank branches, ATMs and credit card networks.

Here's what happened: data centers accounted for 225.45 TWh, physical bank branches accounted for 22.68 TWh, independent ATMs accounted for 2.91 TWh, and card networks such as VISA accounted for 7. 81 TWh. The total is 258.85 TWh per year.

The authors note that the indicators for the banking sector turned out to be quite approximate. Due to the incompleteness of the data (although the segment is considered to be well studied and open, much of the information in it is opaque) a number of assumptions and extrapolations had to be made.

Moreover, the energy consumption of banks is not limited to the activities listed above, so it is very likely that the actual consumption of banks is even higher. But, at the same time, this study gives an approximate order of expenses.

Digital gold vs real gold

In addition to the banking system, the results of comparing the environmental friendliness of Bitcoin, which is called “digital gold,” with real gold, may be interesting. In the study, prepared by the Galaxy Digital team, provides interesting data on this matter. Thus, they estimate energy consumption associated with gold mining at 240.61 TWh. That is, also significantly more than Bitcoin.


Although Bitcoin is often criticized due to the energy costs associated with its mining, the situation is not so clear-cut. Looking at the bigger picture, the environmental footprint of Bitcoin and mining remains smaller than traditional banking or even gold mining.

This material and the information contained herein do not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.