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Abstract

The digital currency Bitcoin is known for its energy hunger and associated carbon footprint. Investors, how-ever, must not neglect further environmental, social, and governance issues related to digital currencies. Therefore, we urge the adoption of a more comprehensive view in assessing the externalities of investments in Bitcoin and other cryptocurrencies.

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... environmental and not only energetic) LCA for the Bitcoin. De Vries et al. [50] or Jiang et al. [12] being the only studies initiating such perspective taken into account of the Anthropocene in its totality. These authors all agree that 'renewable energies will not make Bitcoin greener' [9]. ...
... Several limitations can be mentioned here: at the methodological level, the review discussed in this third section only focused on reports dealing with the accessible data on mining activitiesit is worth mentioning that these activities are difficult to capture and measure [6]. The advantage of providing a holistic perspective on the environmental impact of POW based mining industry also has some limitations since it does not propose a direct method to measure the different CO 2 emissions mentioned in equation (2) actually this aspect is still highly debates in the literature [9,50]. ...
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... However, cryptocurrency can bring us some new environmental, social, and government governance-related hidden dangers. [6] In recent years, external events have influenced financial assets that cannot be ignored. During COVID-19, the price of investment products will fluctuate sharply, and this fluctuation will be much more significant than before COVID. ...
... Additionally, smart contract software development could benefit from security coding standards and more mature design patterns to avoid vulnerabilities. Furthermore, blockchain solutions could suffer from energy consumption that could hurt the ESG factors in an organization [156,157]. If blockchain became a mainstream technology, it would have a problematic impact in our environment [158,159]. ...
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... This has led to a decrease in external financing constraints for enterprises (Domenech et al., 2019), thus effectively promoting green production and reducing industrial pollution (Pizzi et al., 2021). Digital currencies based on blockchain technology such as Bitcoin are not conducive to environmentally friendly development due to the large amount of energy consumption generated during the mining process (Vries et al., 2021). ...
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... This study only estimates the historical energy use and emissions of the Ethereum network. We do not consider other environmental, social, or governance issues [68] such as electronics waste, overall fairness of cryptocurrencies, or effects of financial deregulation. We do not compare the energy use or emissions of Ethereum to other distributed computing systems or financial networks, we do not make predict future energy use or emissions, and we do not attempt to account for emissions responsibility. ...
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... An average Bitcoin transaction fee can vary from anywhere between $2 US to $59 US, with a transaction taking several minutes to several days to complete 12 [92]. As well as being unfeasible towards achieving its prescribed use case, there is broad consensus among scientific experts that a climate-friendly bitcoin, enabling broad environmental, social, and governance benefits, is highly unlikely in its current form [93,94]. Individual investors may benefit from the speculative gamble of cryptocurrency production and trading. But those who are socially, economically, culturally, politically, institutionally, or otherwise marginalised are especially vulnerable to bitcoin's climate costs [95]. ...
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... An average Bitcoin transaction fee can vary from anywhere between $2 US to $59 US, with a transaction taking several minutes to several days to complete m [92]. As well as being unfeasible towards achieving its prescribed use case, there is broad consensus among scientific experts that a climate-friendly bitcoin enabling broad environmental, social, and governance benefits, is highly unlikely in its current form [93,94]. Individual investors may benefit from the speculative gamble of cryptocurrency production and trading. But those who are socially, economically, culturally, politically, institutionally, or otherwise marginalised are especially vulnerable to bitcoin's climate costs [95]. ...
Preprint
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... It could be an advantage, as nobody can alter or change the data; however, with some of the possible opt-out options, it will be impossible to delete the data that was collected [32]. From the environmental perspective, the concern is due to the large amount of energy needed that is associated with carbon emissions [33]. The Cambridge Centre for Alternative Finance (CCAF) [34] estimates that the current annual estimate of energy consumption of Bitcoin, which uses a blockchain, is 50 terawatt/hour (TWh), which could satisfy the energy need of the University of Cambridge for 365 years, is around 0.55% of the global electric production, and is equivalent to the annual energy consumption of countries as Sweden or Malaysia. ...
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Ulrich Gallersdörfer is a research associate in the Department of Informatics at the Technical University of Munich. His research focuses on identity management in blockchains. His interest extends to further aspects of the technology, ranging from environmental implications to data analytics applications. Lena Klaaßen is a graduate student at TUM School of Management at the Technical University of Munich. She is specialized in energy markets and accounting. Her research focuses on carbon accounting in the corporate and cryptocurrency space. She has previously analyzed blockchain-related firms for a venture capital fund. Christian Stoll conducts research at the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology and at the Center for Energy Markets of the Technical University of Munich. His research focuses on the implications of climate change from an economic point of view.
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To its proponents, the cryptocurrency Bitcoin offers the potential to disrupt payment systems and traditional currencies. It has also been subject to security breaches and wild price fluctuations. This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired. During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.
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