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The Carbon Footprint of Bitcoin
Abstract
Participation in the Bitcoin blockchain validation process requires specialized hardware and vast amounts of electricity, which translates into a significant carbon footprint. Here, we demonstrate a methodology for estimating the power consumption associated with Bitcoin’s blockchain based on IPO filings of major hardware manufacturers, insights on mining facility operations, and mining pool
compositions. We then translate our power consumption estimate into carbon emissions, using the localization of IP addresses. We determine the annual electricity consumption of Bitcoin, as of November 2018, to be 45.8 TWh and estimate that annual carbon emissions range from 22.0 to 22.9 MtCO2. This means that the emissions produced by Bitcoin sit between the levels produced by the
nations of Jordan and Sri Lanka, which is comparable to the level of Kansas City. With this article, we aim to gauge the external costs of Bitcoin and inform the broader debate on the costs and benefits of cryptocurrencies.
... BTC has grown as a financial instrument, yet concerns have risen due to its consensus mechanism, which requires miners to consume large amounts of electricity. As this energy is largely derived from fossil fuels, it increases carbon emissions and causes significant environmental damage (Stoll et al. 2019;Mora et al. 2018). ...
... The energy consumed for BTC mining is comparable to the annual electricity consumption of some countries (De Vries 2018), contributing to GHG emissions and further expanding BTC's carbon footprint (Mora et al. 2018). In particular, BTC mining operations in China have raised sustainability concerns due to their reliance on fossil fuels such as coal (Stoll et al. 2019). ...
... According to the Cambridge University Bitcoin Electricity Consumption Index, BTC mining consumes over 100 TWh of energy annually, exceeding the yearly energy consumption of countries like Argentina and the Netherlands (Cambridge Centre for Alternative Finance 2023b; De Vries 2018). This situation creates a significant conflict between the cryptocurrency sector and global climate goals (Mora et al. 2018;Stoll et al. 2019). ...
Assuring environmental sustainability is essential for the continuity of the ecosystem. Every sector of the economy has some degree of impact on environmental sustainability. The United Nations (UN)’ Sustainable Development Goals (SDGs) have placed these objectives within a broader global framework, offering a global plan aimed at ensuring environmental sustainability. This study assesses the role of cryptocurrency mining on environmental sustainability, incorporating monthly data for the period from 2015 to 2023. In this context, the impact of the electrical energy consumed in Bitcoin mining, which has the largest transaction volume among cryptocurrencies, and the climate policy uncertainty on Bitcoin greenhouse gas (GHG) emissions are examined by applying dynamic stimulated autoregressive distributed lag (DARDL) and kernel‐based regularized least squares (KRLS) methods. The results of the empirical analysis indicate that the increase in Bitcoin electricity consumption and climate policy uncertainty have a significant negative impact on Bitcoin GHG emissions. Put another way, cryptocurrency mined using fossil fuels and climate policy uncertainty poses a considerable threat to environmental sustainability. These findings are crucial for policy makers and all stakeholders who want to achieve environmental sustainability goals to develop proactive proposals. It is also highlighted that Bitcoin mining should bring environmental regulations that can mitigate environmental degradation.
... In the same way, cryptocurrencies are thought to be the biggest uncontrolled markets in the world (Aldridge & Décary-Hétu, 2016). Some European countries, like Austria, Belgium, and Croatia, have no laws or rules about how to use cryptocurrency (Stoll et al., 2019). The fact that deals based on cryptocurrency don't have a central point of control means that makes it harder to track, which may help hide criminal actions (Böhme et al., 2015). ...
... A payment on the Bitcoin platform consumes about 58 times more energy than a Visa credit transaction (Stoll et al., 2019). The authors contend that despite the fact that Visa depends on numerous banking and institutional systems that require vast amounts of energy to operate, this energy consumption is still dwarfed by that of cryptocurrency (de Vries, 2018). ...
... This objective can be achieved in cold climates by utilizing the substantial heat energy produced during computer processes necessary for resolving complex arithmetic problems. A portion of it can be effectively utilised to heat residential spaces and to do various other domestic tasks that require substantial heat (Stoll et al., 2019). ...
Bitcoin and other popular cryptocurrencies have gained a lot of attention in recent years. Within the confines of the blockchain, users can acquire and exchange this coin. The first cryptocurrency, Bitcoin, was created to enable direct online payments without relying on centralised financial institutions. The implementation of blockchain technology in the utilisation of cryptocurrency has garnered attention from various entities such as the banking industry, stakeholders, government, and individual investors. Studies on cryptocurrencies are still in their infancy and are limited. This article will analyse the potential in the cryptocurrency such as the security of its technology, cheap transaction costs, and high investment return in order to provide meaningful guidance and viewpoint to the academic field and users. This paper's novelty lies in its examination of legislation and regulation, high energy usage, the possibility of bubbles and crashes, and network attacks. This study will provide a systematic review for the future endeavours of cryptocurrency and its application. The current review is beneficial to academics and managers, as well as those seeking a more balanced knowledge of these emergent financial products.
... The major examples of sustainable crypto-assets are green cryptocurrencies, renewable energy tokens, and Islamic Defi tokens, among others. Empirical studies have investigated the environmental impacts of cryptocurrencies, for instance, the sustainability of Bitcoin and blockchains [3], Bitcoin emissions and global warming [4,5], carbon footprint emissions from Bitcoin mining [6,7], Bitcoin mining and environmental concerns [8], asymmetric effects of crypto-assets on environmental sustainability [9], cryptocurrency return predictability and CO 2 emissions [10], water and carbon footprint of cryptocurrencies [11], cryptocurrency mining, power market stability and climate perspectives [12], cryptocurrencies and global sustainability [13], and Bitcoin mining and climate change [14]. ...
... First, this study extends the emerging literature on cryptocurrencies and CO 2 emissions nexus. Specifically, we complement the works of [5][6][7][8][9][10]14], among others. Second, this study offers a methodological contribution by employing a data-driven approach to analyse the environmental impacts of both conventional and sustainable crypto-assets. ...
... Numerous studies have shed light on the link between cryptocurrency energy consumption particularly Bitcoin's carbon footprint and the environment [6,14,[24][25][26][27], and the findings of these studies are mixed. The seminal work of O'Dwyer and Malone [28] has started the important emerging debate regarding the energy and environmental footprint of cryptocurrencies. ...
Earlier studies used classical time series models to forecast the nonlinear connectedness of conventional crypto-assets with CO2 emissions. For the first time, this study aims to provide a data-driven Nonlinear System Identification technique to study the nonlinear connectedness of crypto-assets with CO2 emissions. Using daily data from January 2, 2019, to March 31, 2023, we investigate the nonlinear connectedness among conventional crypto-assets, sustainable crypto-assets, and CO2 emissions based on our proposed model, Multiple Inputs Single Output (MISO) Nonlinear Autoregressive with Exogenous Inputs (NARX). Intriguingly, the forecasting accuracy of the proposed model improves with the inclusion of exogenous input variables (conventional and sustainable crypto-assets). Overall, our results reveal that conventional crypto-assets exhibit slightly stronger connectedness with CO2 emissions compared to sustainable crypto-assets. These findings suggest that, to some extent, sustainable crypto-assets provide a solution to the environmental issues related to CO2 emissions. However, further improvements in sustainable crypto-assets through technological advances are required to develop more energy-efficient decentralised finance consensus algorithms, with the aim of reshaping the cryptocurrency ecosystem into an environmentally sustainable market.
... Unfortunately, Goodkind et al. (2020) cited work by this source, Alex De Vries (2018), a blogger who has gained notoriety through his "Digiconomist" website, whose data, the non-peer reviewed work draws from extensively. Goodkind et al. (2020) also cited Stoll et al. (2019) (co-authors of De Vries), which, while also non-peer reviewed, attempts to present academic rigour and systematic research. Unfortunately, on initial review, the work is quickly undone in the section titled "validity of results": "Our best-guess power consumption of 45.8 TWh may result in carbon emissions between 0 and 51.0 MtCO2 (100% clean surplus electricity versus 100% coal-fired power generation)" (Stoll et al. 2019 Other than a potential upper limit guess, without considering the balance of energy generation and so the amount of emitted carbon, there is effectively no meaning in the findings of the study. ...
... Goodkind et al. (2020) also cited Stoll et al. (2019) (co-authors of De Vries), which, while also non-peer reviewed, attempts to present academic rigour and systematic research. Unfortunately, on initial review, the work is quickly undone in the section titled "validity of results": "Our best-guess power consumption of 45.8 TWh may result in carbon emissions between 0 and 51.0 MtCO2 (100% clean surplus electricity versus 100% coal-fired power generation)" (Stoll et al. 2019 Other than a potential upper limit guess, without considering the balance of energy generation and so the amount of emitted carbon, there is effectively no meaning in the findings of the study. For example, if all bitcoin mining was carried out on renewable energy, "The Carbon Footprint of Bitcoin" would be zero, instead they conclude the work by suggesting the footprint is within the very tight range of 22.0 to 22.9 MtCOs, presented without supporting data, so making limited sense. ...
... While country and region wide figures of emissions (with their associated health and social impacts) can be calculated, the work pays no attention to the actual form of electricity that bitcoin miners use. In a similar fashion to Stoll et al. (2019), by having no information about this critical variables, the findings have very limited value or meaning. ...
Bitcoin uses energy to ensure that only transactions that are consistent with the protocol are added to the Bitcoin blockchain. This type of consensus mechanism allows anyone to be part of the network, while also preventing a party from attempting to attack the network by successfully processing fraudulent transactions. Unfortunately, many see this energy use as wasted energy, that can negatively affect the environment, although critically, it is the process that produces the electricity, not the bitcoin mining itself that emits pollution, which at times is forgotten. This short response paper attempts to highlight limitations of such a piece focusing on the negative environmental impact of bitcoin mining, Goodkind et al. (2020). While there are a number of follow-up pieces that take similar approaches and use similar data, this particular piece has a range of weaknesses, since its publication has received a considerable amount of attention (160 citations) and fed into follow up publications by the same authors. This paper provides suggestions for addressing identified limitations, through revising the literature being drawn from and applying finer grained analysis techniques to the data. This review concludes by suggesting that if these suggestions were followed, Goodkind et al.'s (2020) findings would be significantly different, so not mislead the reader into worrying about the "cryptodamages" of bitcoin. Instead the work would be able to contribute to understanding and knowledge related to the environmental impact of bitcoin mining. The work concluded by presenting an outline of further research that could be conducted to present finer grains insight onto the actual impact of bitcoin mining on human health from case examples.
... Under the worst (fully fossil-fuel commitment) scenario, daily emissions lead to 139 Mt of CO 2 emissions [3]. These findings demonstrate that BT as the major cryptocurrency contributes to environmental degradation and its extensive energy dependence plays a crucial role in its contribution to environmental pollution [12]. ...
... Empirical results of [26] also put forth the carbon costs of mining activities for four major cryptocurrencies and the results indicate that they account for CO 2 emissions between 3-15 million tons a year and the trend is increasing given the continuing profitability of mining though the prices are too volatile. Stoll, Klaaßen, and Gallersdörfer [12] explored the carbon footprint problem of BT and showed that it is a result of the PoW algorithm that necessitates significant EC during the validation process. The spillover effects are captured to occur due to the electricity demand and the hash rates, which are the primary sources of risks, and the necessity to achieve sustainability of BT is highlighted [28]. ...
... Though not all cryptocurrencies are energy intensive, the majority is, therefore, there is a need for policies to reduce environmental externalities. However, the fear of control could have many negative effects on the market [12]. 3 Given the presence of nonlinearity and heteroskedasticity in BT, EC, and CO 2 emissions, modeling dependency, contagion, comovement, and causality using nonlinear copula generalized autoregressive conditional heteroskedasticity ...
Bitcoin’s (BT) energy demand due to the proof of work mining algorithm and transaction methods has been criticized in recent literature because of BT’s global energy consumption (EC) being equal to or even greater than that of some industrialized economies. This study explores the contagion and causality dynamics under nonlinearity and heteroskedasticity with Markovian-type regime switches among BT price volatility, EC from BT, and its effects on the global carbon dioxide (CO2) emissions with a daily sample of January 2, 2012–December 24, 2023. In the empirical methodology, following the preliminary tests that indicated nonlinearity and heteroskedasticity, this study employed novel Markov-switching-based nonlinear volatility copula and causality models to capture the marginal distributions of BT, its EC and CO2 emissions, and their joint distributions for contagion and tail dependence and determine nonlinear and asymmetric causality relations in distinct regimes of high and low volatility governed by Markov chains. The empirical results indicate significant and positive copula parameters with high magnitudes demonstrating asymmetric contagion and tail dependence occurring at the extreme levels of BT price volatility in the upper and lower tails during both regimes. Novel Markov-switching-based copula causality tests designated unidirectional causality from BT to CO2, as well as from BT’s EC to CO2 emissions during each regime coupled with existent bidirectional causality confirming cyclical feedback effects between BT prices and its EC in both regimes. For robustness and comparison, single-regime copula models were employed, and their findings confirmed the results concerning significant and positive tail dependence and contagion. However, the single-regime approach led to a set of inconsistencies in causality results owing to omitting nonlinearity while capturing heteroskedasticity and confirming the nonrejection of causality between BT, EC, and CO2 emissions. Important policy recommendations include green alternatives to cryptocurrency-mining algorithms.
... Current analysis of the climate impact of BTC mining has primarily utilized the Average Emission Factor (AEF) method, a static approximation of carbon emissions within the power system, which can underestimate emissions or neglect regional carbon transmission. Stoll et al. [15] find BTC's energy and climate footprint is high, even comparable with Jordan. They estimate annual energy consumption is 45.8 TWh and induce carbon emissions up to 22.9 MtCO2 in 2018 using mining machine positioning data. ...
... Niaz et al. [24] considered using RE curtailment in the grid, finding that BTC mining could use RE curtailment for mining production in the Texas power grid. But they regarded the RE-curtailment series as external, Table 1: summarized modeling and research coverage for literature references Grid operation modeling Research Aspect carbon emission renewable prompt regional transmission [8,9,11,15,16] √ ...
... This assumption was made because the pattern of the electricity market in China and the export of hydropower to the southwest are based on an annual cycle that characterizes miners' pursuit of low-cost electricity and maximizing profits. Regarding the electricity price, many previous studies, such as Stoll et al. [15], have used an electricity price of 0.05 USD/kWh. However, in China, the corresponding electricity price by province is generally higher than 0.05 USD/kWh, which leads to an overestimation of the energy consumption of BTC mining. ...
Global climate challenges, coupled with the rapid expansion of digital industries, such as cryptocurrency mining, necessitate a comprehensive understanding of their environmental impacts. This study presents a novel dynamic regional model to assess carbon emissions from Bitcoin (BTC) mining within China's coal-heavy, interconnected power system. Our evaluation revealed that traditional average-emission-factor (AEF) methods significantly underestimated emissions by as much as 25% due to their failure to account for marginal emissions and grid complexities. Historical data from 2011 to 2021 reveal that cumulative carbon emissions reached approximately 103 megatonnes. In China, the 2021 regulatory ban on BTC mining, aimed at curbing these emissions, is projected to reduce them by an additional 25.5 megatonnes annually. However, the ban has resulted in nearly 20 TWh of renewable energy (RE) curtailment. Therefore, we propose to exploit the curtailed RE for green hydrogen production, which could yield about 0.4 mega-tonnes of hydrogen and confer about 8.2 megatonnes of low-carbon benefits annually. Our research underscores the effectiveness of policy interventions and highlights the potential for similar strategies in other globally interconnected grids. This work not only fills a critical gap by providing a scalable and accurate framework for environmental impact assessments but also explores the implications of digital technology regulations and offers insights into regional equity concerns within energy transitions. Moreover, the proposed model could be further extended to other regions, enhancing global strategies for regulating digital technologies and promoting sustainable energy use.
... For instance, De Vries 5 introduced the Bitcoin Energy Consumption Index to quantify the network's energy consumption, reporting Bitcoin's electricity demand at 2.55 GW h in 2018. 6 Later, Stoll et al. 7 estimated Bitcoin's energy consumption at 45,800−53,500 GW h along with its GHG footprint at 22.0−22.9 MtCO 2 using a factorial approach, but did not account for regional energy mix variations. ...
... While the aforementioned studies have provided valuable insights, they have predominantly relied on a factorial approach (mostly global weighted averages) to estimate the energy and environmental footprint of the Bitcoin network. 9−11 This approach often lacks detailed spatial distribution information on the Bitcoin network and the electricity mix of participating countries, 7,9,10,12 leading to oversimplifications that may not accurately capture the true environmental impact. The reliance on global averages masks regional disparities where the environmental consequences, such as carbon emissions, water usage, and land occupancy, can vary significantly depending on local energy sources, mining practices (equipment), and climate conditions. ...
... Although it has many advantages, blockchain technology still poses some challenges (Croman et al., 2016;Kshetri, 2017;Stoll et al., 2019;Tapscott & Tapscott, 2017;Weber et al., 2016;Zohar, 2015): • It is complex to implement. Integrating blockchain into existing supply chains and systems might be challenging for many fashion companies, especially those without significant technological infrastructure or expertise. ...
... However, solutions to these challenges will likely emerge as technology evolves and the industry recognises the value of transparent and ethical operations. Brands willing to invest in and pioneer these solutions will likely be at the forefront of the next wave of sustainable fashion (Croman et al., 2016;Kshetri, 2017;Stoll et al., 2019;Tapscott & Tapscott, 2017;Weber et al., 2016;Zohar, 2015). ...
... Proof of Work (PoW) is the Bitcoin's core mechanism that exemplifies this issue. It relies on energy-intensive cryptographic computations, which are estimated to be at 181.67 terawatthours (TWh) annually in 2025 [4] to secure the network -a burden that continues to spark environmental concerns [5], [6], [7]. PoW diverts vast resources to puzzles offering no practical utility beyond security. ...
Blockchain technology enables secure, transparent data management in decentralized systems, supporting applications from cryptocurrencies like Bitcoin to tokenizing real-world assets like property. Its scalability and sustainability hinge on consensus mechanisms balancing security and efficiency. Proof of Work (PoW), used by Bitcoin, ensures security through energy-intensive computations but demands significant resources. Proof of Stake (PoS), as in Ethereum post-Merge, selects validators based on staked cryptocurrency, offering energy efficiency but risking centralization from wealth concentration. With AI models straining computational resources, we propose Proof of Useful Intelligence (PoUI), a hybrid consensus mechanism. In PoUI, workers perform AI tasks like language processing or image analysis to earn coins, which are staked to secure the network, blending security with practical utility. Decentralized nodes--job posters, market coordinators, workers, and validators --collaborate via smart contracts to manage tasks and rewards.
... Regarding the environmental impacts of cryptocurrencies, according to the Cambridge Bitcoin Electricity Consumption Index (2022), 7 Bitcoin, for instance, consumed 134 terawatt-hours (tWh) of electricity in 2021, slightly less than double the consumption of 2019 (Digiconomist 2022). 8 Moreover, Stoll et al. (2019) showed that the energy source that powers Bitcoin is overwhelmingly fossil based (coal), implying annual emissions of 22-22.9 megatons of CO2-equivalent, which corresponds to the emissions of the city of Kansas City, positioning Bitcoin between countries such as Jordan and Sri Lanka. ...
In this review, we analyze the existing literature on the role of alternative currencies within degrowth. While degrowth emerged in the early 2000s alongside growing awareness of accelerating environmental crises and widening global inequalities, alternative currencies have a longer history. Alternative currencies have served as devices for communities seeking to become less dependent on the dominant economic system, but degrowth and technological advancements are potentially reshaping alternative currencies, both in what their purpose could be and in how they operate. When combined with degrowth, these currencies are often expected to foster greater resilience at the local level and slow down the pace of socio-ecological metabolism. Building on our review, we propose a research agenda that explores how policy proposals and concepts such as universal basic income, localization, and entropy can be understood in relation to alternative currencies. Our main contribution is to identify points of convergence and tension between alternative currencies and degrowth while proposing prospective research questions to guide future studies.
... water (Edemetti et al., 2022) are widely discussed. In this regard it is furthermore prompted that the environmental impacts, including the energy consumption of IT infrastructures and their carbon footprints, need further investigation (Stoll et al., 2019as cited in Buonocore et al., 2022. The extent to which these concerns are driven by ethical, economic, or other considerations is unclear from the literature. ...
The modelling of flora and fauna is vital for understanding and digitally representing our environment, yet their dynamic modelling in digital twins lags behind human-made inventions like manufacturing and the built environment. The interdisciplinary nature of this research complicates tracking advancements, and no comprehensive overview exists. This Systematic Literature Review (SLR), using the PRISMA method, addresses this gap by analysing studies on dynamic modelling of flora and fauna in digital twins and 3D city models. It covers descriptive metrics and qualitative aspects, identifying key research fields, directions, users, and developers. Additionally, this SLR details on digital twin data, modelling techniques, actuators, user experience with human-computer interaction, and ethical considerations. The findings highlight that the digital twin concept is being increasingly applied to the dynamical modelling of flora and fauna. Moreover, the broad relevance of this research is demonstrated across various fields including ecology, forestry, urban studies, and agriculture, where diverse methods and technologies are used, though progress remains uneven. Currently, precision agriculture is leading the way in automated, bidirectional synchronisation between digital twins and their physical counterparts. Complementing traditional modelling techniques with AI and machine learning where appropriate, expands modelling capabilities. Meanwhile, multimodal interfaces enhance the immersive user experience. Despite these advances, challenges persist in data availability, foundational knowledge, complex interaction modelling, standardisation and transferability, underscoring the need for continued research. Digital twins for the biotic environment show promise in supporting United Nations Sustainable Development Goals 2, 11, 13, 14, and 15. This overview supports researchers and practitioners in developing digital twin applications which include flora and fauna.
... Policy and regulatory frameworks are of crucial importance, especially in addressing the environmental impact of BTC mining (de Vries, Gallersdörfer, Klaaßen, & Stoll, 2022). Governments and international bodies are increasingly recognizing the need for intervention to bring down the carbon emissions associated with cryptocurrencies (Jiang et al., 2021;Stoll, Klaaßen, & Gallersdörfer, 2019). Proposed measures include, among others, the implementation of carbon taxes, incentives for the use of renewable energy in mining operations and stricter regulations on energy consumption (Bukhari, Ansari, Yousif, Hassan, & Hassan, 2024;Chamanara, Ghaffarizadeh, & Madani, 2023;. ...
... A significant problem is its high energy usage, especially when it comes to cryptocurrencies like Bitcoin, which have a big carbon footprint because they require a lot of processing power to verify transactions [35]. For example, a single Bitcoin transaction can require more energy than regular financial transactions do-up to several weeks' worth-for the average household (UN News, MDPI) [36], [37]. Furthermore, scalability is still an issue because growing networks typically have lower transaction speeds and throughput overall, which makes them less efficient (MDPI). ...
Most conventional contract systems have issues with middlemen, drawn-out implementation procedures, fraud risk, and human error. Considering this, the project uses smart contract technology to provide a decentralized, automated, and safe solution in an effort to address such inefficiencies and the trust issues they raise. Smart contracts enable self-execution of contracts whose conditions are expressed explicitly in lines of code by presenting solutions using blockchain technology. The concept behind a smart contract is that each party may carry out their portion of the duties without depending on a third party and the contract will automatically execute in the meantime. This automation significantly reduces transaction costs while simultaneously improving security and transparency. With the use of this underlying technology, smart contracts may be used to directly code parties' compliance with their duties under the agreement and the blockchain will keep an immutable record of every transaction. For smooth and dependable transactions, smart contracts offer a dependable and effective substitute for conventional contract methods. Furthermore, integrating smart contracts with cutting-edge technologies like machine learning and artificial intelligence could improve decision-making and accelerate operations in a variety of sectors. Their application extends beyond financial transactions to areas such as supply chain management, energy trading, and healthcare, showcasing their versatility. Despite these advantages, issues like energy consumption, scalability, and regulatory compliance still need creative solutions. Ongoing research and development aim to address these issues, fostering the evolution of smarter, more sustainable contract systems. By leveraging these advancements, smart contracts keep opening the door for a revolution in the digital economy that will increase productivity and confidence.
... Mining often takes place in regions with cheap electricity, typically from coal-fired plants, increasing carbon emissions and contributing to global warming. Bitcoin's annual electricity consumption is comparable to some medium-sized countries [11], with carbon emissions reaching hundreds of thousands of tons [12,13]. ...
This paper mainly talks about the regulatory issues of cryptocurrencies and their potential impacts. With the rapid development of digital currencies, their status in cross-border payments is constantly rising, but it also brings high volatility and various economic crime risks, which is expected to change the current financial system. This paper conducts a literature review and case analysis to compare the different practices of countries in cryptocurrency regulation and points out the deficiencies of the current regulatory framework in responding to technological changes and safeguarding the interests of investors. It proposes relevant suggestions to enhance transparency, security, and innovation. The study also pays special attention to stablecoins and central bank digital currencies, which explores whether it can mitigate the market volatility and potential financial risks of cryptocurrencies to some extent. The future regulation of cryptocurrencies needs global cooperation and technological innovation to enable cryptocurrencies to play a positive role in economic development.
... Many cryptocurrencies, particularly those that rely on proof-of-work consensus mechanisms, require significant energy consumption for mining operations (Taylor 2018, p. 12;Wendl, Doan and Sassen 2023, p. 2). For example, Bitcoin mining has been criticized for its substantial carbon footprint, as it often relies on fossil fuels for energy (Stoll, Klaaßen andGallersdörfer 2019, p. 1655;Onat et al. 2024, p. 4;Bajra, Rogova and Avdiaj 2024, p. 8). This environmental impact raises ethical questions about the sustainability of blockchain technologies and the responsibilities of users and developers in mitigating harm. ...
This article explores the evolution of crypto-anarchy, tracing its origins from the cypherpunk movement to the rise of decentralized finance (DeFi) and its transformative effects on legal and economic systems. Central to crypto-anarchy is the belief in individual empowerment through privacy, financial autonomy, and decentralization, which allows users to bypass traditional intermediaries like banks. While these technologies offer increased freedom and financial inclusion, they also introduce significant risks such as money laundering, tax evasion, and the facilitation of illegal activities, posing challenges to current regulatory frameworks. The article examines the socio-economic implications of decentralization, including both the democratization of finance and the widening wealth disparities, as early adopters often gain disproportionate rewards. Environmental concerns related to energy-intensive cryptocurrencies like Bitcoin and ethical dilemmas surrounding privacy versus accountability are also addressed. The article concludes by examining the potential for AI, blockchain, and decentralized governance models to further disrupt traditional financial and governance structures, while emphasizing the need for robust regulatory frameworks to mitigate risks and ensure long-term sustainability. It envisions a future where decentralized technologies contribute to a more transparent, equitable, and participatory global economy.
... Furthermore, the implementation of insetting measures by supply chain companies is currently only rudimentarily established with no precise rules on how insetting should be accounted for. The lack of uniform accounting rules, clear definitions and methodologies to account for carbon and emissions, questions the integrity of companies' emission reduction and net zero targets (Ebersold et al. 2023;Stoll et al. 2019). The low investment in sustainable supply chains is in contrast to the number of 'hazy' voluntary business commitments made (UNEP 2021). ...
This paper highlights the need to consider the processes and relations in the political, knowledge, technical and socio-material complex that underpins the emergence of a soil-based carbon economy. This economy, characterised by the proliferation of voluntary soil-based carbon markets, carbon farming policies, supply chain and other initiatives, operates through private mechanisms (offsetting, insetting) and public policy instruments. This emerging economy entails a number of inherent political and knowledge contestations associated with claims around the mitigation potential of soil carbon sequestration and carbon farming. We adapt a social ecological systems (SES) framework to understand these contestations and draw on a corpus of agricultural, ecological, political and social science literatures to identify and pose critical questions for future research. We conceptualise the emerging soil-based carbon economy as interactions and outcomes among actors embedded within a defined SES (governance, resource systems, resource units, actors). Five themes are identified: Marketisation, abstraction and technogovernance; Power relations and expert knowledge; Disputing the meaning and value of soil carbon; Disruptions: new interfaces, configurations and actor relations; Uncertainties and capabilities. These underpin a research agenda proposal. We argue that an integrative conceptualisation is essential to equitably account for the broad mix of social, technical, economic, political, and ecological contexts in which soil carbon is embedded and present options for operationalising the conceptualisation.
... $/block). It should be noted that miners look for cheaper and sustainable energy sources to protect their profitability (Krause & Tolaymat, 2018;Stoll et al., 2019;Zade et al., 2019), which makes it difficult to think about a clear reference for the electricity price, so that any of these values should be considered as an approximation. In any case, the average cost per block is not suitable for the assessment of the supply curve, as it is necessary to take into account the specific mining time for each block, so that we will just make use further below of the calculated E day value as a reference, without loss of generality. ...
Blockchain transactions market is expected to gain momentum in the coming years, in a context with gradual transition to fee-regime in many cryptocurrencies, the expansion of blockchain technology to different business areas and the requirement for high transaction throughput in new blockchain-based applications. In this context, the economic assessment of the supply and demand curves defining the transactions market is key to recognize its potential weaknesses, but also to minimize risks and to improve operational efficiency when designing or upgrading blockchain-based applications. The research covers a gap by conducting an empirical analysis of these curves in Bitcoin, based on an extensive dataset spanning two time periods in 2021 and 2023 selected as having different levels of Mempool congestion. The empirical findings support the understanding of why Bitcoin transaction fees are subject to high volatility and how the protocol evolutions made to date have shifted the supply curve. The demand curve, although relatively elastic around the equilibrium price, turns out to be extremely dynamic. On the other hand, the inelasticity of the supply curve, described by an exponential distribution, explains the sharp variations in transaction fees observed under demand shocks. The results bring to light the importance of the transactions market layout as an element of control over the intrinsic problems associated with an imperfect competition, whereas additional sustainability and security aspects beyond pure economic considerations are to be taken into account in the design of this market.
... One of the main criticisms of Bitcoin is its significant energy consumption, primarily due to the process of mining, where powerful computers solve complex mathematical problems to validate transactions on the blockchain (Vries, 2020). The energy-intensive nature of Bitcoin (BTC hereafter) mining has raised concerns about its environmental impact, particularly in terms of carbon emissions (Stoll et al., 2019) and water footprints (Vries, 2024). In contrast, the blue-green economy emphasizes the transition to renewable energy sources and energy efficiency. ...
Climate change impact on the Blue-Green economy has been of great concern. Further cryptocurrency mining is impacting the economy in an adverse fashion. Moreover, impact of gold mining, extraction on Blue-Green economy and even relationship with cryptocurrency is another interesting facet. Therefore, we delved into the interconnectedness among five indices, two of which focus on the green economy (ICLN-iShares and CNRG-SandP), whereas three are on the blue economy (BJLE- BNP Paribas ESG Blue Economy ETF and PIO-Invesco Global Water ETF) and OCEN (IQ Clean Oceans ETF) alongside the traditional assets Bitcoin and gold indices. We considered between October 26, 2021, to January 5, 2024 for the study. This study highlighted some cardinal findings. First, BJLE can be used as a hedge against OCEN and PIO (all are in Blue economy). Second, excessive water usage in Bitcoin mining is detrimental to Blue-Green economy. Third, positive policy shock force spillover effect to cool down. Fourth, spillover typically increases as both economic uncertainty (US Banks collapse in 2023) and geopolitical risk (Russia-Ukraine conflict) increase. Fifth, there has been an increased responsiveness of these markets to immediate events (near-term bias). Therefore, this study would assist the policymakers and investors, especially in the Blue-Green domain.
... A study by Mora et al. [112] estimates that Bitcoin mining alone could push global warming beyond the 2 • C threshold set by the Paris Agreement within a few decades if left unchecked. Similarly, Stoll et al. [113] reported that Bitcoin's annual energy consumption was comparable to that of countries like Austria, with a carbon footprint equivalent to that of a major global city. These results emphasize the environmental effects of blockchain technologies, particularly in their present energy-intensive formulations. ...
Digital transformation, powered by technologies like AI, IoT, and big data, is reshaping industries and societies at an unprecedented pace. While these innovations promise smarter energy management, precision agriculture, and efficient resource utilization, they also introduce serious environmental challenges. This paper examines the dual impact of digital technologies, highlighting key threats such as rising energy consumption, growing e-waste, and the increased extraction of raw materials. By synthesizing the existing literature, this study highlights mitigation strategies that include adopting energy-efficient practices, integrating renewable energy, and implementing circular economy principles. It emphasizes the need for a balanced approach—making the most of technological advances while protecting the environment. By identifying gaps in the current research, this paper also suggests future areas to explore to ensure that digital progress does not come at the expense of our planet. This review advocates for an integrated strategy to achieve sustainable digital growth aligned with global climate goals.
... For instance, the emissions of Bitcoin alone could push global warming above 2°C [2]. These estimates are alarming and might not be entirely plausible [3], but the carbon footprint generated by Bitcoin mining is visible and even comparable with some countries [4]. The major factors responsible for the high energy consumption and CO 2 emissions in cryptocurrencies, namely, the Proof of Work consensus mechanism, redundancy in operation and traffic, mining devices, and energy sources [5]. ...
The lightning network (LN) is a technological solution designed to solve the bitcoin blockchain transaction speed problem by introducing off-chain transactions. Since LN is a sparse and highly distributed network with three predominant routing protocols, its native pathfinding algorithms can potentially find multi-hop payment paths similar from the payment sender’s perspective, but the algorithms themselves have different performance, computational cost, energy consumption, and ultimately different CO2 emissions per step in the pathfinding phase. Bitcoin itself generates approximately 61.4 million tons of CO2 eq. per year. Since the LN is built on top of bitcoin, every small change in its energy consumption can have a significant impact on overall pollution. In this paper, we show that the reinforcement learning (RL) approach can reduce these costs and achieve better performance in terms of energy consumption at each pathfinding step. We introduce one-shot path prediction and propose a RL solution for a network agent that learns its neighborhood and uses local knowledge to cleverly solve the pathfinding problem and outperform native pathfinding algorithms.
... The environmental ramifications of cryptocurrencies, with a particular focus on BTC, have emerged as a matter of apprehension owing to their substantial energy usage. In their study, (Stoll et al., 2019) analyzed the carbon footprint associated with BTC mining and juxtaposed it with traditional banking systems. The findings of their study underscored the significant energy consumption associated with the process of BTC mining, resulting in elevated levels of carbon dioxide emissions. ...
The present study investigates the co-moment between sustainability (STB), Bitcoin (BTC), gold, and carbon emissions (CO2) by analyzing daily data spanning from June 3, 2013, through June 30, 2023. In this study, we employ wavelet connectedness such as wavelet transform coherence (WTC), partial wavelet coherence (PWC), continuous wavelet transforms (CWT), and multiple wavelet coherence (MWC) to examine the interconnections among the variables under investigation. The results demonstrate that, as a sustainability-focused index, STB shows connectedness with CO2 emissions, reflecting the increasing importance of STB considerations in financial markets. Gold, often considered a safe-haven asset, has shown a unique relationship with the other variables, especially during periods of economic uncertainty. As a relatively new and highly volatile asset, BTC exhibits different dynamics than traditional assets like gold. Sustainability considerations have become increasingly important in financial markets, and indices like STB reflect this growing trend. Bitcoin appears to exhibit a stronger and more frequent positive correlation with the broader financial market compared to its correlation with gold. The outcomes of the study are validated through a robustness check of time and frequency connectedness. These findings have significant ramifications for businesses, investors, and legislators who must navigate the complex interplay between STB, money, and environmental dynamics in a constantly changing global context.
... By modeling miners' efforts in terms of resource expenditure and reward probability, the Tullock framework helps to understand how rational agents optimize their strategies in decentralized systems [Cornes and Hartley, 2005]. Additionally, the framework sheds light on potential inefficiencies and externalities, such as energy consumption, that arise in competitive mining processes [Stoll et al., 2019]. ...
This paper investigates the algorithmic complexity of computing the pure Nash Equilibrium (PNE) in Tullock contests. A key aspect of this analysis lies in the elasticity parameter , which dictates whether a contestant i's cost function is convex, concave, or neither. Our primary contribution is the identification of how the domains of govern the computational complexity of solving Tullock contests. Specifically, we establish the following results: - Efficient Algorithms for : When no contestant's elasticity parameter lies within the interval (1,2], we show that an efficient algorithm can be designed to compute the pure Nash Equilibrium. - Hardness Results for : When many values fall within the interval (1,2], we prove that determining the existence of a pure Nash Equilibrium cannot be achieved in polynomial time, assuming the Exponential Time Hypothesis (ETH). - Approximation Algorithms for : In cases where many values fall within the interval (1,2], we propose a Fully Polynomial-Time Approximation Scheme (FPTAS) to compute an -approximate PNE, provided an exact PNE exists. All our algorithms are implemented efficiently to handle large-scale instances. Computational experiments validate their effectiveness, even under challenging scenarios with complex elasticity distributions.
... Although in this study various advantages of using blockchain in the context of LCA are introduced, it also has to be mentioned that blockchain itself can have negative consequences for the environment. The negative environmental impact of blockchain technology can be significant, as highlighted by Stoll et al. (2019), who found that Bitcoin's annual electricity consumption reaches 45.8 TWh, contributing to carbon emissions between 22.0 and 22.9 MtCO 2 per year. Therefore, when considering blockchain applications, including in the context of LCA, it is crucial to take potential negative environmental consequences into account. ...
Purpose
Companies need to enhance their understanding of the environmental impacts of their products and services. Life cycle assessment (LCA) has become a prevalent method for evaluating these impacts. Despite significant advancements in LCA methodology and data availability, several challenges persist. Digital technologies may offer solutions to these challenges in LCA. Therefore, it is crucial to explore how digital technologies can be integrated into LCAs.
Methods
A systematic literature review was conducted to examine the application of digital technologies, specifically blockchain, the Internet of Things (IoT), big data, and artificial intelligence (AI), within LCAs. The review included 103 peer-reviewed journal articles and conference papers. Contributions of these technologies were categorized according to the four LCA phases outlined in ISO 14040/44 standards. The findings were synthesized into a framework that highlights the individual and combined potential of these technologies for enhancing LCAs.
Results and discussion
The review reveals that IoT is primarily used in the inventory analysis phase, while blockchain, AI, and big data are applied across the goal and scope definition, inventory analysis, impact assessment, and interpretation phases. Based on these findings, a comprehensive theoretical concept was developed to outline all possible combinations of these four technologies with LCA for synergistic application.
Conclusions
This study proposes a framework for integrating four key digital technologies—blockchain, IoT, big data, and AI—into LCAs to support environmental sustainability assessment from a company perspective. This framework offers a current overview and a foundation for future research. For LCA practitioners, it serves as a strategic tool for identifying potential technologies and making informed decisions about which digital technologies to apply in their assessments.
Los criptoactivos son elementos disruptivos tecnológicos que surgen dentro de la teoría neoliberal económica y están correlacionados con la globalización y la revolución tecnológica. Dentro de la amplia gama de los criptoactivos, las criptomonedas son el producto informático más representativos de la revolución tecnológica que impactan en la economía nacional e internacional, transformando las relaciones económicas y sociales, así como los conceptos jurídicos tradicionales relacionados a la personalidad y propiedad.
This study employed both bibliometric analysis and a comprehensive review of the existing literature to examine 3844 publications in cryptocurrency research, which were collected from the Web of Science Core Collection Database. The study has utilized bibliometric methods to analyze the most productive countries and regions, research institutions, and authors in cryptocurrency research. Cluster analysis of co‐citation articles indicates three main themes in cryptocurrency research over the past decade: the efficiency of the cryptocurrency market, innovation, application, and governance of blockchain technology as well as risk management of cryptocurrencies. Keyword co‐occurrence analysis reveals three major future research directions regarding cryptocurrency: (1) using machine learning methods to forecast price returns of cryptocurrencies; (2) how to enhance the security, legitimacy, and environmental sustainability of cryptocurrencies; (3) further exploration of the impact of various unexpected events on the risks of cryptocurrencies under global instability. In the section of literature review, two to three representative papers from the five most‐cited authors in cryptocurrency research are summarized. Additionally, 28 of the most noteworthy papers, selected based on three different criteria, are presented. These papers cover different periods and research topics, and a brief yet comprehensive overview of these 28 influential papers is provided.
Blockchain technology is a sequence of interconnected blocks comprising secure and transparent peer-to-peer transaction records. It is a combination of blocks with shared memory, resistant to falsification and builds trust; resilience in technology. This chapter provides an overview of blockchain technology, architecture, and applications. It explores the carbon footprint of blockchain system and examines its environmental impacts through case studies on Bitcoin mining, Ethereum, Chia network, food supply chain, Tezos blockchain, and geothermal energy. It also endeavors to analyze energy consumption and Carbon dioxide (CO2) emissions and eventually understand high-power usage, which has led to environmental impacts. The carbon footprint, which is the total greenhouse gas (GHG) emitted, is released at high levels and significantly affects habitats because to its ability to trap atmospheric heat. This chapter also focuses on the mitigation process, namely, renewable energy. The chapter in the conclusion underscores the importance to make blockchains more environmentally sustainable.
Blockchain Technology is evolving and the applications are increasing with newer areas being touched upon. Naturally, there has been enough research through publications also happening in the same space. Thus, it is important to do a bibliometric analysis to provide an understanding of the progress till now and the available trends thereon. This study aims to explore the state of affairs, progress till now, issues & trends and the future of Blockchain Technology through a bibliometric analysis covering the period from 2015 to 2024. For the study, the researchers use Scopus database to collect relevant publications. These are further analysed through Vosviewer software. This will provide rich insights for the future researcher.
Purpose
This study aims to examine the impact of climate-related risks on cryptocurrency volatility during crisis periods, focusing on the physical risk index (PRI) and transition risk index (TRI). It investigates how acute and chronic climate events, alongside regulatory and technological changes, influence market dynamics in major cryptocurrencies, including Bitcoin, Ethereum, Litecoin and Ripple.
Design/methodology/approach
A fuzzy logic model is employed to evaluate the effects of PRI and TRI on cryptocurrency volatility. The model’s accuracy is validated using root mean square error (RMSE) metrics to ensure reliability.
Findings
The results reveal that acute events (e.g. hurricanes and wildfires) and chronic risks (e.g. long-term environmental disruptions) significantly heighten cryptocurrency volatility. Transition risks, including regulatory and technological shifts, also play a pivotal role. Bitcoin and Ethereum exhibit the highest sensitivities, reflecting the critical influence of climate risks on market stability.
Research limitations/implications
This study enriches the literature by integrating climate risk factors into cryptocurrency market analysis and advancing fuzzy logic models to assess non-linear interactions in financial markets. It provides a novel framework for evaluating external shocks’ impact on digital assets.
Practical implications
Investors and market participants can use these findings to incorporate climate risks into their investment strategies, diversify portfolios and anticipate periods of instability. The insights also guide policymakers in developing resilient frameworks that align cryptocurrency regulations with environmental goals.
Social implications
By linking climate risks to cryptocurrency market behavior, this research emphasizes the need for sustainable investment practices and collaborative policy efforts. It advocates for integrating environmental sustainability into financial systems to mitigate systemic risks and promote economic resilience.
Originality/value
This research is among the first to apply PRI and TRI within a fuzzy logic framework to cryptocurrency markets, offering new insights into how climate risks drive financial volatility during crisis periods.
Using data on 282 Chinese cities, we explore the relationship between the digital economy and green development, and the underlying mechanisms. We find a significant inverted U-shaped relationship between digital economy and green development. This suggests that it plays a “creative” function in fostering urban green growth in the early stages of digital economic development. However, too much digital economic expansion will put some strain on the environment and have a “destructive” effect on urban green development. Mechanism analysis reveals two important processes for realizing the dividends of green development via the digital economy: improving technological innovation and reducing resource misallocation. Finally, the impact of the digital economy on green development significantly varies by geographic location and slope levels.
Purpose
Set against a rapidly evolving technologically driven investment landscape, this research aims to explore the complex interrelations among artificial intelligence, alternative energy stocks, eco-friendly investments, geopolitical risks (GPRs) and Ethereum’s energy consumption.
Design/methodology/approach
This work encompasses deploying the H2O Automated Machine Learning approach, explicitly focusing on analyzing market indicators. Additionally, the research emphasizes the evaluation of feature significance, identifying crucial variables that significantly influence the predictive outcomes. Besides, this study employs Shapley Additive Explanations to interpret the model’s output, offering a detailed analysis of feature contributions and enhancing the model’s transparency.
Findings
Key variables such as GPR, clean market (PBW) and the natural gas index (NG) significantly influence oil price predictions. The model demonstrates reliability, with areas for improvement in capturing unexplained variance.
Practical implications
This study offers valuable insights for energy sector market analysts, traders and policymakers, aiding in strategic decision-making and understanding market trends.
Social implications
This research emphasizes fostering clean and sustainable energy markets. It emphasizes the crucial role of advancements in artificial intelligence and renewable energy investments in accelerating the transition to environmentally responsible energy markets, highlighting their significance in fostering sustainability and mitigating climate change impacts.
Originality/value
This study pioneers integrating cutting-edge machine learning methodologies with crude oil market analysis, shedding light on critical influencing factors and forecasting aspects.
Cryptocurrencies are decentralized digital financial services that do not physically exist in the world of tangible products and goods, and therefore purportedly offer some positive environmental sustainability features. However, since they are based on blockchain technology, which requires a relatively large input of energy, their climatic impact is not benign. Furthermore, they are very volatile and characterized by low levels of transparency and control, thus creating some negative economic and social sustainability effects. Stablecoins, which are a pegged type of cryptocurrency, exhibit much less volatility and have higher levels of management and interoperability. This raises the following question: are stablecoins more sustainable compared to other cryptocurrencies? To explore this, a sustainability assessment was conducted, comparing cryptocurrencies and stablecoins across environmental, social, and economic dimensions while identifying the key characteristics of sustainability. It was found that stablecoins can mitigate the economic and social risks associated with cryptocurrencies and thus increase their overall sustainability. Moreover, since stablecoins are managed and governed to a greater extent, a key consideration in their development is the selection and implementation of more appropriate mechanisms that can reduce energy use and enhance sustainability. Finally, stablecoins offer more effective—and not just more efficient—solutions, based on value co-creation between several providers and a customer.
Purpose
Cryptocurrencies have transformed the financial landscape and raised environmental concerns, particularly distinguishing between energy-intensive (dirty) cryptocurrencies and environmentally friendly (green) cryptocurrencies. This study investigates the role of energy-intensive and ecologically friendly cryptocurrencies in sustainable investments, exploring their potential as hedging tools amid market and geopolitical stresses.
Design/methodology/approach
Employing a time-varying parameter vector auto-regression (TVP-VAR) connectedness approach, the research analyzes the interactions and spillover effects among clean and dirty cryptocurrencies, green bonds, and traditional financial assets. It also explores portfolio diversification strategies like minimum variance, correlation and connectedness portfolios, evaluating their risk minimization efficacy while incorporating green financial instruments. Empirical data on daily closing prices and financial indices are used to assess financial interconnectedness and evaluate portfolio diversification strategies.
Findings
Green bonds consistently provide strong hedging capabilities, while clean cryptocurrencies exhibit a more nuanced role influenced by market maturity and regulations. The results underscore the significance of promoting green finance to bolster investments in sustainable projects and enhance risk management strategies for investors. This research enriches the green finance literature by detailing the financial interconnectedness within the market and providing strategic insights for embedding sustainability in investment portfolios against a backdrop of global economic and geopolitical uncertainties.
Research limitations/implications
The research highlights the importance of green finance in promoting sustainability and reducing environmental impact. It advocates for regulatory frameworks that support sustainable financial instruments, encouraging the development of financial products aligned with environmental goals and fostering a more sustainable economy.
Practical implications
These research findings provide actionable guidance for investors and policymakers to develop diversified investment strategies incorporating green bonds and clean cryptocurrencies capable of balancing risks and returns. The study also urges policymakers to establish clear guidelines and incentives for green investments, improving transparency and effectiveness in green finance markets.
Originality/value
This study uses an innovative TVP-VAR connectedness approach to examine the interactions and spillover effects among clean and dirty cryptocurrencies, green bonds and traditional financial assets. It provides new insights into the roles of green bonds and clean cryptocurrencies as hedging tools in volatile markets, enhancing the understanding of financial interconnectedness and sustainable investment strategies.
The convergence of Blockchain and Artificial Intelligence (AI) holds transformative potential for advancing sustainable development across various sectors. Blockchain's decentralized and immutable ledger ensures transparency, accountability, and secure data management, addressing key challenges in governance, supply chain monitoring, and resource distribution. AI, with its advanced analytics and predictive capabilities, complements blockchain by enabling data-driven decision-making and optimization of processes. Together, these technologies can foster innovative solutions in areas such as renewable energy management, precision agriculture, financial inclusion, and climate action. This paper explores the synergies between Blockchain and AI, highlighting their applications in achieving the United Nations' Sustainable Development Goals (SDGs).
This paper explores the potential of green digital currencies as a tool to promote sustainable practices in the digital economy and evaluates their effectiveness in reducing carbon emissions compared to cryptocurrencies and traditional currencies. The study employs a descriptive-analytical methodology. The analysis results reveal that green cryptocurrencies represent a promising path towards mitigating the environmental impact of digital currencies while promoting responsible investment and renewable energy use. By adopting these innovative solutions, we can build a more sustainable digital economy and support sustainable development goals, despite the challenges and limitations faced by green digital currencies
This study investigates the impact of Bitcoin’s energy and water consumption on environmental sustainability, focusing on the load capacity factor (LCF) and the roles of energy transition green technology in major cryptocurrency-producing nations. Utilizing the method of moments quantile regression (MMQR) approach, the findings reveal a negative impact of mining energy consumption on environmental sustainability, particularly in the lower quantiles, with a stronger negative effect in the higher quantiles. Energy transition plays a critical role in moderating this impact, though the shift towards cleaner energy sources has not been sufficient to mitigate the adverse environmental effects. The water footprint has limited influence on LCF across upper and lower quantiles. Moreover, the results do not support the LCF hypothesis. An increase in mining activity leads to a rise in LCF, while this effect turns negative in the 90th quantile. These findings underscore the importance of energy transition in reducing Bitcoin’s environmental footprint and emphasize the need for policymakers to swiftly enact regulations and foster innovative technologies to promote environmentally sustainable digital currencies while providing valuable insights into water resource management.
Blockchain technology has been introduced to tackle the data issues arising from centralization in carbon management. However, current blockchain systems remain inefficient for carbon management in construction projects, falling short in scalability, security, and high throughput. Moreover, blockchain mainly serves as a database, so it is not easy to shape stakeholders’ low-carbon behaviors actively and directly. Thus, this paper designs a novel incentive mechanism (i.e., consensus mechanism with incentive design) in blockchain, Proof of Carbon Reduction (PoCR), to enhance blockchain system performance and promote low carbon practices among stakeholders. To this end, carbon reduction credit (CR credit) is first proposed to evaluate stakeholders’ carbon performance via the reporting and crowd-wisdom subsystems. Second, the optimized Byzantine Fault Tolerance (BFT) with a novel block leader election algorithm and a fair reward allocation method is proposed for the transaction consensus process in the blockchain to reduce communication complexity while enhancing consistency using cryptographic techniques. Third, controlled experiments are conducted and research findings show that PoCR can achieve (1) effective low-carbon incentive, providing financial returns for low-carbon performance and enhancing income fairness, (2) excellent efficiency, reducing the quadratic message complexity of typical BFT-based protocols to 0(mn), and increasing the throughput over 10% (Delegated BFT) and 25% (Algorand) while reducing latency over 80% (Practical BFT) and 20% (Algorand), (3) enhanced security, outperforming existing protocols in anti-attack and anti-corruption capabilities. This paper contributes to both blockchain design and low-carbon incentive design, paving the way for decentralized low-carbon management in construction.
Information and communication technologies (ICT) are generally believed to have significant potential to reduce energy intensity. In contrast to previous empirical studies, which have relied on aggregated data, we conduct the first large-scale firm-level investigation into this relationship. Our results, which are based on administrative panel data on 28,600 German manufacturing firms, confirm a robust negative relationship between software capital (our proxy for the degree of firm digitalization) and energy intensity for the years 2009 to 2017. However, the effect size is rather small. For the average firm, we find that a 1 percent increase in software usage relates to a decrease in energy intensity by 0.003 percent. Hence, contrary to previous industry-level results, we do not observe substantial energy intensity improvements in connection with ICT adoption. Moreover, we find that the relationship between ICT and energy intensity exhibits properties that can lead to an aggregation bias.
JEL Classification: C32, H23, O33, O38, Q56, Q58.
This paper provides a brief overview of the ongoing financial revolution, which extends beyond the emergence of cryptocurrencies as a digital medium of exchange. At its core, this revolution is driven by a paradigm shift rooted in the technological advancements of blockchain and the foundational principles of Islamic economics. Together, these elements offer a transformative framework that challenges traditional financial systems, emphasizing transparency, equity, and decentralized governance. The paper highlights the implications of this shift and its potential to reshape the global economic landscape.
Purpose
The purpose of this paper is to analyse the dynamic and evolving relationship between Bitcoin mining (BTC) and climate policy uncertainty. By using the newly developed U.S. Climate Policy Uncertainty (CPU) indicator by Gavriilidis (2021) as a proxy for global climate-related transition risk, this study aims to explore the complex bidirectional causality between these two critical phenomena in climate-related finance. Further, we explore how economic and market factors influence the cryptocurrency market, focusing on the relationship between CPU and Bitcoin mining.
Design/methodology/approach
We employ a linear and non-linear rolling window sub-sample Granger causality approach combined with a probit model to examine the time-varying causalities between Bitcoin mining and the U.S. Climate Policy Uncertainty (CPU) indicator. This method captures asymmetric effects and dynamic interactions that are often missed by linear and static models. It also allows for the endogenous determination of key drivers in the BTC–CPU nexus, ensuring that the results are not influenced by ad-hoc assumptions but are instead grounded in the data’s inherent properties.
Findings
The findings indicate that Bitcoin mining is negatively impacted by climate policy uncertainty during periods of increased environmental concern, while its energy-intensive nature contributes to increasing climate policy uncertainty. In addition to market factors, such as Bitcoin halving, and alternative assets, such as green equity, five main macroeconomic factors influence these relationships: financial instability, economic policy uncertainty, rising oil prices and increasing industrial production. Furthermore, two non-linear dynamics in the relationship between climate policy uncertainty and Bitcoin (CPU-BTC nexus) are identified: the “anticipatory regulatory decline effect”, when miners boost activity ahead of expected regulatory changes, but this increase is unsustainable due to stricter regulations, compliance costs, investor scrutiny and reputational risks linked to high energy use.
Originality/value
This study is the first in the literature to examine the time-varying and asymmetric relationships between Bitcoin mining and climate policy uncertainty, aspects often overlooked by static causality and average-based coefficient models used in previous research. It uncovers two previously unidentified non-linear effects in the BTC-CPU nexus: the “anticipatory regulatory decline effect” and the “mining-driven regulatory surge”, and identifies major market factors macro-determinants of this nexus. The implications are substantial, aiding policymakers in formulating effective regulatory frameworks, helping investors develop more sustainable investment strategies and enabling industry stakeholders to better manage the environmental challenges facing the Bitcoin mining sector.
Modern çağın en önemli yeniliklerinden biri paranın dijitalleşmesidir. Günümüzde birçok dijital para birimi bulunmaktadır ve işlem hacmi ile piyasa değeri açısından Bitcoin öne çıkmaktadır. Bu çalışmada, kripto para birimleri içinde önemli bir yere sahip olan Bitcoin'in çevre ile ilişkisi incelenmektedir. 2010 Ağustos – 2024 Mart dönemine ait aylık veriler kullanılarak, Bitcoin ile karbon emisyonu arasındaki ilişki ampirik olarak test edilmiştir. Ampirik analizde öncelikle durağanlık mertebesini belirlemek amacıyla geleneksel ve güncel ampirik metotlardan yararlanılmaktadır. Diğer yandan geleneksel eşbütünleşme yaklaşımlarının yanında doğrusal olmayan eşbütünleşme testleri içerisinde güncel testler arasında yer alan Hepsağ (2021) eşbütünleşme testi kullanılmaktadır. Son olarak değişkenler arasındaki nedensellik ilişkisi incelenmiştir. Ampirik bulgular, Bitcoin ile karbon emisyonları arasında uzun dönemli bir ilişki olduğunu göstermektedir. Ayrıca, Bitcoin'den karbon emisyonlarına doğru Granger nedensellik olduğu sonucuna ulaşılmıştır. Elde edilen sonuçlar, Bitcoin üretiminde çevresel kaliteyi artırıcı önlemler alınmasının gerekliliğini ortaya koymaktadır.
Biogas, consisting mainly of CO2 and CH4, offers a sustainable source of energy. However, this gaseous stream has been undervalued in wastewater treatment plants owing to its high CO2 content. Biogas upgrading by capturing CO2 broadens its utilisation as a substitute for natural gas. Although biogas upgrading is a widely studied topic, only up to 35% of produced raw biogas is upgraded in the world. To open avenues for development research on biogas upgrading, this paper reviews biogas as a component in global renewable energy production and upgrading technologies focusing on electrochemically driven CO2 capture systems. Recent progress in electrochemical CO2 separation including its energy requirement, CO2 recovery rate, and challenges for upscaling are critically explored. Electrochemical CO2 separation systems stand out for achieving the most affordable technology among the upgrading systems with a low net energy requirement of 0.25 kWh/kg CO2. However, its lower CO2 recovery rate compared to conventional technologies, which leads to high capital expenditure limits the commercialisation of this technology. In the last part of this review, the future perspectives to overcome the challenges associated with electrochemical CO2 capture are discussed.
The financial sector has seen a trend toward more decentralization, especially led by the introduction and prevalence of blockchain. However, decentralization technologies may increase energy consumption through the use of potentially less optimized hardware, replication, and consensus-related operations, as well as further cryptographic overhead when involving privacy enhancing technologies (privacy-enhancing technologys (PETs)). Blockchain technology is usually at the center of criticism related to electricity consumption, manifesting in sensationalized headlines such as “Bitcoin [or blockchain] uses more electricity than country X.” In this chapter, we focus on important distinctions that need to be made when analyzing the electricity consumption of a blockchain. We show that while for proof of work (PoW) blockchains, electricity consumption is an inherent feature and may justify such headlines; the energy intensity of blockchains with other consensus mechanisms is multiple orders of magnitude lower. We also argue that for these blockchains non-PoW blockchains and decentralized systems in general, a trade-off between the security achieved through decentralization and energy consumption exists, as the additional electricity consumption compared to centralized systems can mainly be attributed to redundant computations introduced by decentralization. Lastly, we discuss different approaches to managing the tension between decentralization and electricity consumption.
У цій статті досліджується взаємозв'язок між криптовалютою Bitcoin та нафтовими ринками на прикладі декількох інструментів, включаючи ф'ючерси на нафту марок WTI та Brent, ф'ючерси E-mini та біржовий фонд нафти США ETF (USO), за період з 2020 до 2024 року. Використовуючи коінтеграційний аналіз, кореляційні метрики та показники волатильності, було виявлено чіткі закономірності між різними інструментами нафтового ринку. В той час як прямі ф'ючерси на нафту не демонструють значної коінтеграції з Bitcoin, USO ETF демонструє слабку коінтеграцію, незважаючи на те, що має найнижчу кореляцію (0,2952) серед усіх досліджених інструментів. Аналіз волатильності показує, що USO демонструє нижчу волатильність (0,3761) порівняно з ф'ючерсами на нафту WTI (0,6294) та Bitcoin (0,6107), що свідчить про стримуючий вплив фінансових продуктів, орієнтованих на роздрібну торгівлю. Кореляційний аналіз показує помірний позитивний зв'язок між криптовалютою Bitcoin та нафтовими ф'ючерсами (0,38), але цей зв'язок значно варіюється в часі та між різними інструментами. Отримані дані свідчать про те, що спосіб доступу інвесторів до нафтових ринків суттєво впливає на зв'язок активу з криптовалютою, що підкреслює важливість структури фінансових продуктів у міжринковій динаміці. Отримані результати мають практичне значення для диверсифікації портфелів, управління ризиками та аналізу ринкової структури в епоху зростаючої інтеграції між традиційними та цифровими фінансовими ринками. Результати дослідження сприяють вивченню того, як фінансові інновації впливають на відносини між криптовалютами та товарними ринками, і свідчать про те, що точки доступу до ринку мають таке ж значення, як і відносини між активами, що лежать в їх основі.
There are now hundreds of cryptocurrencies in existence and the technological backbone of many of these currencies is blockchain—a digital ledger of transactions. The competitive process of adding blocks to the chain is computation-intensive and requires large energy input. Here we demonstrate a methodology for calculating the minimum power requirements of several cryptocurrency networks and the energy consumed to produce one US dollar’s (US, respectively. Comparatively, conventional mining of aluminium, copper, gold, platinum and rare earth oxides consumed 122, 4, 5, 7 and 9 MJ to generate one US$, respectively, indicating that (with the exception of aluminium) cryptomining consumed more energy than mineral mining to produce an equivalent market value. While the market prices of the coins are quite volatile, the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase. During this period, we estimate mining for all 4 cryptocurrencies was responsible for 3–15 million tonnes of CO2 emissions. © 2018, The Author(s), under exclusive licence to Springer Nature Limited.
Bitcoin is a power-hungry cryptocurrency that is increasingly used as an investment and payment system. Here we show that projected Bitcoin usage, should it follow the rate of adoption of other broadly adopted technologies, could alone produce enough CO2 emissions to push warming above 2 °C within less than three decades.
While it is understood that cities generate the majority of carbon emissions, for most cities, towns, and rural areas around the world no carbon footprint (CF) has been estimated. The Gridded Global Model of City Footprints (GGMCF) presented here downscales national CFs into a 250 m gridded model using data on population, purchasing power, and existing subnational CF studies from the US, China, EU, and Japan. Studies have shown that CFs are highly concentrated by income, with the top decile of earners driving 30%–45% of emissions. Even allowing for significant modeling uncertainties, we find that emissions are similarly concentrated in a small number of cities. The highest emitting 100 urban areas (defined as contiguous population clusters) account for 18% of the global carbon footprint. While many of the cities with the highest footprints are in countries with high carbon footprints, nearly one quarter of the top cities (41 of the top 200) are in countries with relatively low emissions. In these cities population and affluence combine to drive footprints at a scale similar to those of cities in high-income countries. We conclude that concerted action by a limited number of local governments can have a disproportionate impact on global emissions.
The electricity that is expended in the process of mining Bitcoin has become a topic of heavy debate over the past few years. It is a process that makes Bitcoin extremely energy-hungry by design, as the currency requires a huge amount of hash calculations for its ultimate goal of processing financial transactions without intermediaries (peer-to-peer). The primary fuel for each of these calculations is electricity. The Bitcoin network can be estimated to consume at least 2.55 gigawatts of electricity currently, and potentially 7.67 gigawatts in the future, making it comparable with countries such as Ireland (3.1 gigawatts) and Austria (8.2 gigawatts). Economic models tell us that Bitcoin’s electricity consumption will gravitate toward the latter number. A look at Bitcoin miner production estimates suggests that this number could already be reached in 2018.
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Bitcoin is a digital currency based on a peer-to-peer payment system managed by an open source software and characterized by lower transaction costs, greater security and scalability than fiat money and no need of a central bank. Despite criticisms about illegal uses and social consequences, it is attracting the interest of the scientific community. The purpose of this work is to define and evaluate the current trends of the literature concerned with the sustainability of bitcoin, considering the environmental impacts, social issues and economic aspects. From the analysis it emerges that the transition of the whole monetary system in the new cryptocurrency will result in an unacceptable amount of energy consumed to mine new bitcoins and to maintain the entire virtual monetary system, and probably bitcoin will remain a niche currency. Blockchain, which is the base for a distributed and democratically-sustained public ledger of the transactions, could foster new and challenging opportunities. Sharing the framework of medical data, energy generation and distribution in micro-grids at the citizen level, block-stack and new state-driven cryptocurrencies, may benefit from the wide spread of blockchain-based transactions. Under the perspective of its being a driver of social change, bitcoins and related blockchain technologies may overcome the issues highlighted by numerous detractors.
China has the richest hydropower resources in the world. Yunnan's exploitable hydropower resources rank third in China, second only to Tibet and Sichuan Province. Yunnan has experienced soaring growth in installed hydropower capacity in the past several decades. The fast development of hydropower makes the province one of the main producers and exporters of hydroelectricity. However, with inconsistencies between hydropower development and various related resources, more and more hydropower generation has been curtailed in recent years. The increasing curtailment of hydropower generation not only caused large-scale waste of sustainable energy, but also impaired the potential higher contribution of hydropower for GHG emission reduction. This paper provides an overview of the hydropower resources and their development in Yunnan and systematically analyzes the constraints causing the curtailment of hydropower generation. We argue that there are several constraining factors such as slowdown of economic growth, inadequate transmission capacity due to a weak grid structure, inconsistency between power grid companies and local government, and uneven distribution of precipitation seasonally and annually. Recommendations are made to alleviate or eliminate hydropower curtailment in Yunnan and other hydropower rich areas.
Carbon intensity of power generation is an important indicator to show the direct competitiveness of electricity against the combustion of fossil fuels. In this study, we estimate the carbon intensities of power generation in China’s provinces. Most provinces are likely to have a carbon intensity per unit of power generation between 500 and 700 g CO2/kWh in 2020, which justifies the progress of electrification from the power generation perspective. With the growing share of low carbon power generation, most provinces show trends of decline in carbon intensity between 2015 and 2020. However, some provinces are expected to see increase in carbon intensity due to increasing share of coal power generation in their power mixes. Coal is still a major growth contributor in most provinces, despite significant growths of low carbon energy sources. Furthermore, renewable energy sources can help reduce the carbon intensity of power generation, but a better coordination among provinces is required, alongside with strong government support and direction.
Since its deployment in 2009, Bitcoin has achieved remarkable success and spawned hundreds of other cryptocurrencies. The author traces the evolution of the hardware underlying the system, from early GPU-based homebrew machines to today’s datacenters powered by application-specific integrated circuits. These ASIC clouds provide a glimpse into planet-scale computing’s future.
Existing studies on the evaluation of CO2 emissions due to electricity consumption in China are inaccurate and incomplete. This study uses a network approach to calculate CO2 emissions of purchased electricity in Chinese provinces. The CO2 emission factors of purchased electricity range from 265 g/kWh in Sichuan to 947 g/kWh in Inner Mongolia. We find that emission factors of purchased electricity in many provinces are quite different from the emission factors of electricity generation. This indicates the importance of the network approach in accurately reflecting embodied emissions. We also observe substantial variations of emissions factors of purchased electricity within sub-national grids: the provincial emission factors deviate from the corresponding sub-national-grid averages from -58% to 44%. This implies that using sub-national-grid averages as required by Chinese government agencies can be quite inaccurate for reporting indirect CO2 emissions of enterprises' purchased electricity. The network approach can improve the accuracy of the quantification of embodied emissions in purchased electricity and emission flows embodied in electricity transmission.
Demand-side flexibility (DSF) in the electricity grid has become an active research area in recent years. While temporal flexibility (e.g. load shedding, load shifting) is already discussed intensively in literature, spatial load migration still is an under-researched type of DSF. Spatial load migration allows us to instantly migrate power-consuming activities among different locations. Data centers (DCs) are power-intensive and process information goods. Since information goods are easily transferable through communication networks, power-intensive processing of information goods is not necessarily tied to a specific location. Consequently, geographically distributed DCs inherit—in theory—a considerable potential to globally migrate load. We analyze the economics of spatially migrating load to provide balancing power using geographically distributed DCs. We assure that neither of the participating electricity grids will be burdened by this mechanism. By using historical data to evaluate our model, we find reasonable economic incentives to migrate positive as well as negative balancing power. In addition, we find that current scenarios favor the migration of negative balancing power. Our research thus reveals realistic opportunities to virtually transfer balancing power between different market areas worldwide.
Bitcoin is an electronic currency that has become increasingly popular since its introduction in 2008. Transactions in the bitcoin system are stored in a public transaction ledger (‘the blockchain’), which is stored in a decentralized, peer-to-peer network. Bitcoin provides decentralized currency issuance and transaction clearance. The security of the blockchain depends on a compute-intensive algorithm for bitcoin mining, which prevents double spending of bitcoins and tampering with confirmed transactions. This ‘proof-of-work’ algorithm is energy demanding. How much energy is actually consumed, is subject of debate. We argue that this energy consumption currently is in the range of 100–500 MW. We discuss the developments in bitcoin mining hardware. We also briefly outline alternative schemes that are less energy demanding. We finally look at other blockchain applications, and argue that also here energy consumption is not of primary concern.
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.
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