Analyzing asymmetric effects of cryptocurrency demand on environmental sustainability

Erdoğan, Sinan; Ahmed, Maruf Yakubu; Sarkodıe, Samuel Asumadu

doi:10.1007/s11356-021-17998-y

Cited by 46 publications

(20 citation statements)

References 34 publications

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“…The study done by Erdogan et al (2022) provides the evidence where causal association between crypto development and environmental degradation was found. The study applied Toda Yamamoto test to evaluate the association between constructs.…”

Section: Cryptocurrency and Environmental Degradationmentioning

confidence: 97%

Nexus among Crypto Trading, Environmental Degradation, Economic Growth and Energy Usage: Analysis of Top 10 Cryptofriendly Asian Economies

Astini,

Ishrat,

Ramli

et al. 2023

IJEEP

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The higher discharge of carbon emissions in environment is endangering human life as well as eco system. With the emergence of digital technology, crypto trading and blockchain technologies are also causing the paradigm shift in technological needs, however, in parallel, creating unresolved environmental problems especially in the top 10 crypto-friendly Asian economies due to the higher percentage of poisonous emissions. Thereby, the study attempts to scrutinize the nexus among crypto-trading, environmental degradation, economic growth and energy usage. CO2 emissions are taken as a proxy of environmental degradation in the context of crypto friendly Asian economies. The data extracted from WDI and coin market cap covering the period from 2012-2020. The article applied CS-ARDL technique in order to find the association between variables in short and long run. Granger Causality test is also applied to find out the causality among constructs. Findings expose that bi-directional causality exists between crypto trading and carbon emission and crypto trading and energy usage, hence, disturbing environmental sustainability due to high emissions. The paper suggests policy makers and other institutional officers to de-socialize those block chain technologies which consumes high energy and use green technology as their substitute. This helps in the reduction of environmental damages.

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Section: Cryptocurrency and Environmental Degradationmentioning

confidence: 97%

Nexus among Crypto Trading, Environmental Degradation, Economic Growth and Energy Usage: Analysis of Top 10 Cryptofriendly Asian Economies

Astini,

Ishrat,

Ramli

et al. 2023

IJEEP

View full text Add to dashboard Cite

show abstract

“…Since cryptocurrencies are energy intensive, there are natural environmental effects. This important issue has been investigated by Erdogan et al (2022) using asymmetric causality tests developed by Hatemi-J (2012). It is found that there are negative asymmetrical environmental causal impacts of the demand for major cryptocurrencies.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Since cryptocurrencies are energy intensive, there are natural environmental effects. This important issue has been investigated by Erdogan et al. (2022) using asymmetric causality tests developed by Hatemi-J (2012).…”

Section: Literature Reviewmentioning

confidence: 99%

On a regime switching illiquid high volatile prediction model for cryptocurrencies

El-Khatib

Hatemi‐J

2023

JES

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PurposeThe current paper proposes a prediction model for a cryptocurrency that encompasses three properties observed in the markets for cryptocurrencies—namely high volatility, illiquidity, and regime shifts. As far as the authors’ knowledge extends, this paper is the first attempt to introduce a stochastic differential equation (SDE) for pricing cryptocurrencies while explicitly integrating the mentioned three significant stylized facts.Design/methodology/approachCryptocurrencies are increasingly utilized by investors and financial institutions worldwide as an alternative means of exchange. To the authors’ best knowledge, there is no SDE in the literature that can be used for representing and evaluating the data-generating process for the price of a cryptocurrency.FindingsBy using Ito calculus, the authors provide a solution for the suggested SDE along with mathematical proof. Numerical simulations are performed and compared to the real data, which seems to capture the dynamics of the price path of two main cryptocurrencies in the real markets.Originality/valueThe stochastic differential model that is introduced and solved in this article is expected to be useful for the pricing of cryptocurrencies in situations of high volatility combined with structural changes and illiquidity. These attributes are apparent in the real markets for cryptocurrencies; therefore, accounting explicitly for these underlying characteristics is a necessary condition for accurate evaluation of cryptocurrencies.

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“…As a result, it is necessary to find new approaches to mining that are more environmentally friendly, taking into account the mining process and the conditions that encourage individuals and legal entities to engage in this activity. The relationship between the mining process, the increase in the network hashrate and the amount of electricity consumed was established (Erdogan et al, 2022). The potential bidirectional relationship between the price of cryptocurrency and electricity consumption remains unknown.…”

Section: Literature Reviewmentioning

confidence: 99%

Technological Aspects and Environmental Consequences of Mining Encryption

Makurin

2023

ees

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Introduction. The digital economy has significantly changed not only the types, forms and mechanism of payments, but also the form of money itself. Electronic money is becoming more popular, which increases the relevance and importance of the study of technical aspects and environmental consequences of mining encryption. The choice of equipment for cryptocurrency mining and its impact on the environment remains a rather debatable issue. It is also not clear how to calculate the costs of mining cryptocurrencies in order to determine the cost of such coins which creates obstacles to the normal reflection in the accounting of such activities in the future and the payment of the corresponding taxes on such operations where cryptocurrencies are involved. Aim and tasks. The study aims is to investigate modern approaches to cryptocurrency mining and the characteristics of the mining process itself, as well as the selection of the main equipment and a list of costs to ensure this activity takes into account the environmental consequences of mining encryption. Results. Cryptocurrency mining is the process of creating digital currencies. All transactions in the network are not processed by any central authority, but by any user connected to the network. The creation of cryptocurrency, i.e. its emission, is the acquisition of certain property rights. Determining the cost of mining, for example, one bitcoin depends on the amount of resources spent: the depreciation of the equipment that was used to generate new blockchain blocks and the monthly costs of its maintenance, the cost of high-speed Internet service, the configuration of the mining software product on a   particular pool, combined electricity costs. Conclusions. The development of the cryptocurrency market has both positive and negative consequences at the micro and macro levels. Advantages include independence from the state-regulated banking system and general accessibility; high economic efficiency of mining; transparency of transactions, confidentiality and anonymity, security of data owners; high data security against external influences and attacks; absence of time or territorial restrictions; general availability and lack of need to create centralized data repositories; effective mechanism against theft, counterfeiting and inflation, irreversible nature of transactions. At the macro level, the advantages are the high capitalization of cryptocurrencies, which can contribute to meeting the financial needs of the state as a whole and independence from the state. Therefore, further accounting of such a specific asset as cryptocurrency requires detailed research.

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Analyzing asymmetric effects of cryptocurrency demand on environmental sustainability

Cited by 46 publications

References 34 publications

Nexus among Crypto Trading, Environmental Degradation, Economic Growth and Energy Usage: Analysis of Top 10 Cryptofriendly Asian Economies

Nexus among Crypto Trading, Environmental Degradation, Economic Growth and Energy Usage: Analysis of Top 10 Cryptofriendly Asian Economies

On a regime switching illiquid high volatile prediction model for cryptocurrencies

Technological Aspects and Environmental Consequences of Mining Encryption

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