Cryptocurrency energy consumption: Analysis, global trends and interaction

The rapid spread of cryptocurrencies is one of the most relevant trends today. One of the significant risks of their spread is the increase in energy consumption, which has a negative impact on the environment due to carbon emissions. This requires the development of a scientific toolkit for assessi...

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Main Authors: Yevhen Bublyk, Olena Borzenko, Anna Hlazova
Format: Article
Language:English
Published: LLC "CPC "Business Perspectives" 2023-08-01
Series:Environmental Economics
Subjects:
Online Access:https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18663/EE_2023_02_Bublyk.pdf
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author Yevhen Bublyk
Olena Borzenko
Anna Hlazova
author_facet Yevhen Bublyk
Olena Borzenko
Anna Hlazova
author_sort Yevhen Bublyk
collection DOAJ
description The rapid spread of cryptocurrencies is one of the most relevant trends today. One of the significant risks of their spread is the increase in energy consumption, which has a negative impact on the environment due to carbon emissions. This requires the development of a scientific toolkit for assessing relationships and predicting the impact of cryptocurrencies on energy consumption, which is the aim of this paper.With the correlational regression analysis, the model of the dependence of spending on IT sector, energy consumption of Bitcoin, Ethereum and global capitalization of the cryptocurrency market was conducted, based on statistical data from Statista.com, Сoinmarketcap.com and International Data Corporation. To check the possible relationship, tests for the adequacy of the results obtained (Fisher’s test, Student’s t-test) confirmed the correctness of coefficients for independent variables.The results showed a significant direct correlation (Multiple R is 95%) of spending on IT sector, energy consumption and global capitalization of the cryptocurrency market. The established relationships allowed predicting that Bitcoin energy consumption may reach 142 Terawatt hours per year in 2026. And its impact on environment by mining in 2022 was at least 27.4 Mt of CO2 emission.As a proposal, a conclusion was made on the expediency of linking mining to the use of certain sources of electricity production, such as “residual” natural gas, nuclear power, renewable energy sources. The obtained results and conclusions may be used as a basis for political decisions in the field of energy efficiency and climate change mitigation.
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spelling doaj.art-9e9373b00cea4ac1b9e7d9861b5f0e8f2024-01-12T11:41:21ZengLLC "CPC "Business Perspectives"Environmental Economics1998-60411998-605X2023-08-01142495910.21511/ee.14(2).2023.0418663Cryptocurrency energy consumption: Analysis, global trends and interactionYevhen Bublyk0https://orcid.org/0000-0002-6080-9341Olena Borzenko1https://orcid.org/0000-0002-1017-5942Anna Hlazova2https://orcid.org/0000-0003-0102-1420Doctor of Economics, Department of Monetary Relations, Institute for Economics and Forecasting of NAS of Ukraine, UkraineDoctor of Economics, Head of the Sector for International Financial Research, SI “Institute for economics and forecasting of NAS of Ukraine”Ph.D. (Economics),Sector for International Financial Research, SI “Institute for economics and forecasting of NAS of Ukraine”The rapid spread of cryptocurrencies is one of the most relevant trends today. One of the significant risks of their spread is the increase in energy consumption, which has a negative impact on the environment due to carbon emissions. This requires the development of a scientific toolkit for assessing relationships and predicting the impact of cryptocurrencies on energy consumption, which is the aim of this paper.With the correlational regression analysis, the model of the dependence of spending on IT sector, energy consumption of Bitcoin, Ethereum and global capitalization of the cryptocurrency market was conducted, based on statistical data from Statista.com, Сoinmarketcap.com and International Data Corporation. To check the possible relationship, tests for the adequacy of the results obtained (Fisher’s test, Student’s t-test) confirmed the correctness of coefficients for independent variables.The results showed a significant direct correlation (Multiple R is 95%) of spending on IT sector, energy consumption and global capitalization of the cryptocurrency market. The established relationships allowed predicting that Bitcoin energy consumption may reach 142 Terawatt hours per year in 2026. And its impact on environment by mining in 2022 was at least 27.4 Mt of CO2 emission.As a proposal, a conclusion was made on the expediency of linking mining to the use of certain sources of electricity production, such as “residual” natural gas, nuclear power, renewable energy sources. The obtained results and conclusions may be used as a basis for political decisions in the field of energy efficiency and climate change mitigation.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18663/EE_2023_02_Bublyk.pdfBitcoincryptocurrenciesenergy consumptionenergy resourcesgreen economyIT
spellingShingle Yevhen Bublyk
Olena Borzenko
Anna Hlazova
Cryptocurrency energy consumption: Analysis, global trends and interaction
Environmental Economics
Bitcoin
cryptocurrencies
energy consumption
energy resources
green economy
IT
title Cryptocurrency energy consumption: Analysis, global trends and interaction
title_full Cryptocurrency energy consumption: Analysis, global trends and interaction
title_fullStr Cryptocurrency energy consumption: Analysis, global trends and interaction
title_full_unstemmed Cryptocurrency energy consumption: Analysis, global trends and interaction
title_short Cryptocurrency energy consumption: Analysis, global trends and interaction
title_sort cryptocurrency energy consumption analysis global trends and interaction
topic Bitcoin
cryptocurrencies
energy consumption
energy resources
green economy
IT
url https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18663/EE_2023_02_Bublyk.pdf
work_keys_str_mv AT yevhenbublyk cryptocurrencyenergyconsumptionanalysisglobaltrendsandinteraction
AT olenaborzenko cryptocurrencyenergyconsumptionanalysisglobaltrendsandinteraction
AT annahlazova cryptocurrencyenergyconsumptionanalysisglobaltrendsandinteraction