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With Elon Musk's tweets, which contributed to causing an uproar in the crypto market, the question of energy expenditure and impacts on nature due to the use of fossil fuels in Bitcoin mining has returned to the scene. Elon Musk said Tesla would no longer accept payment in Bitcoin for its cars, claiming the environmental impacts of mining were too serious. A contradictory statement, since the cryptocurrency he continues to support, the DOGE, also uses the Proof of Work consensus algorithm to confirm transactions. Despite all the criticism, Elon said Tesla would not sell any newly acquired Bitcoin. A bit contradictory, don't you think?

Didn't he already know about energy expenditure before he acquired Bitcoin for the first time? His real intention in making these statements public is still unclear, but it is an important discussion and one that deserves attention, so that people understand once and for all how Bitcoin works and that the energy expended is precisely what makes it this network so robust and secure.

A recent report by Galaxy Digital found that the Bitcoin network consumes less than half the energy consumed by banks or the gold mining industry. Why is this comparison not made? What are the real interests behind Elon Musk's questions? The question stands.

WHAT IS BITCOIN MINING?

This is the method of generating new coins in which computers dedicated to this activity use computational brute force to solve complex mathematical formulas.

As Bitcoin is part of a decentralized network, there are specific rules for that network. In this specific case, the expectation is that a mathematical problem will be solved by one of the members of the network (miners) every 10 minutes.

At the moment when all machines in the network are looking to solve this mathematical problem to confirm the next transactions, a huge amount of electricity is being consumed. The reward for solving the riddle is the Bitcoins generated in that block, as well as transaction fees from that block. It is important to remember that the more computers trying to confirm the next block, the more electrical energy is used and the more secure the network is.

Despite the difficulty of finding much more detailed information about the banking sector and gold mining, in contrast to the completely transparent Bitcoin blockchain, the Galxy Digital report reached the following conclusion:
The study found that the traditional financial system and gold consume much more energy than Bitcoin

Global financial system: about 263.72 TWh per year (263.72 terawatt hours per year).
Gold Mining: 240.61 TWh per year (terawatt hours per year).
Bitcoin: 113.89 TWh per year.

Notice how the traditional financial system is full of intermediaries for financial settlements.

Data centers, ATMs, physical agencies, credit card companies and many others.

Gold mining is also a complex and energy-intensive process, from production to consumption. The bottom line is that traditional banking systems or even gold mining consume twice as much energy as Bitcoin mining. In addition, Bitcoin energy expenditure is much more easily measured.

The calculations used studies published on Gold.org and, for the banking system, the methodology is explained in detail on the Galaxy Digital GitHub page. The data were confirmed by International Energy Agency (IEA).

Based on the analysis of these data, the assertion that Bitcoin consumes a lot of energy is questionable. Does a system that works in a decentralized manner and has an asset with a fixed and known monetary offer, whose data are easily auditable and transparent, in addition to the energy expenditure being more easily estimated, not justify the use of energy?

Is a way to give people control over their finances and escape monetary authoritarianism, as it is an asset that anyone can own and trade at any time, unlike the complex and segregating infrastructure of the traditional financial system, a waste of energy?

How you answer this probably depends on how you feel about Bitcoin. If you believe Bitcoin is of no use beyond speculation, then it would be logical to conclude that consuming any amount of energy is a waste. Now, if you are one of those people who use it as a tool to escape monetary repression, inflation or capital control, you will probably come to the conclusion that this energy is extremely well spent.