Can Bitcoin Stop Climate Change? Proof of Work, Energy Consumption and Carbon Footprint (SoK)

Ibañez, Juan Ignacio; Freier, Alexander

doi:10.2139/ssrn.4347220

Cited by 2 publications

(3 citation statements)

References 59 publications

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“…Insofar GHG emissions are assumed to be the same, which may not be the case [3]. 0.02095 kWh and 0.0007188724 kWh, which compares to the rangles expected by Platt et al [4, p. 1139].…”

Section: A Discussionmentioning

confidence: 86%

“…The discussion is characterised by arguably three dimensions. First, the debate around whether PoW mining should be considered environmentally harmful or environmentally friendly due to its energy-intensiveness or its non-rival consumption of energy, respectively [2], [3]. Second, the interest in PoS as an alternative DLT consensus mechanism requiring significantly less energy consumption [4].…”

mentioning

confidence: 99%

“…Nevertheless, this is an energy-intensive process. Although this very feature is by design, it has led to criticism [2], [3].…”

mentioning

confidence: 99%

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The Energy Consumption of Proof-of-Stake Systems: Replication and Expansion

Ibañez¹,

Rúa

2023

SSRN Journal

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“…Insofar GHG emissions are assumed to be the same, which may not be the case [3]. 0.02095 kWh and 0.0007188724 kWh, which compares to the rangles expected by Platt et al [4, p. 1139].…”

Section: A Discussionmentioning

confidence: 86%

mentioning

confidence: 99%

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The Energy Consumption of Proof-of-Stake Systems: Replication and Expansion

Ibañez¹,

Rúa

2023

SSRN Journal

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Bitcoin’s Energy Consumption, Price Volatility, and Environmental Pollution: Contagion and Causality Dynamics Under Heteroskedasticity and Nonlinearity

Bildirici,

Ersin

2024

International Journal of Energy Research

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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.

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Can Bitcoin Stop Climate Change? Proof of Work, Energy Consumption and Carbon Footprint (SoK)

Cited by 2 publications

References 59 publications

The Energy Consumption of Proof-of-Stake Systems: Replication and Expansion

The Energy Consumption of Proof-of-Stake Systems: Replication and Expansion

Bitcoin’s Energy Consumption, Price Volatility, and Environmental Pollution: Contagion and Causality Dynamics Under Heteroskedasticity and Nonlinearity

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