The cost of Bitcoin mining has never really increased

The Bitcoin network is burning a large amount of energy for mining. In this paper we estimate the lower bound for the global energy cost for a period of ten years from 2010, taking into account changing oil costs, improvements in hashing technologies and hashing activity. Despite a ten-billion-fold increase in hashing activity and a ten-million-fold increase in total energy consumption, we find the cost relative to the volume of transactions has not increased nor decreased since 2010. This is consistent with the perspective that, in order to keep a the Blockchain system secure from double spending attacks, the proof or work must cost a sizable fraction of the value that can be transferred through the network. We estimate that in the Bitcoin network this fraction is of the order of 1%.Comment: 16 pages, 6 figure

Are we contributing? The who, when, where, and what of the Blockchain Research Landscape

The blockchain technology discourse is diverse, and diffusion is increasing. It is estimated that USD39 billion will be spent within the blockchain ecosystem by 2025. One can view this as an exciting time to be involved in technology. Or another can potentially view this as wasteful spending and exploitation of scarce resources. Additionally, projects and start-ups fail at an alarming rate, making it critical to provide tools to aid decision-makers. Current blockchain research has not yet answered what blockchain is nor what situations it is best suited to. This paper problematises the current discourse on blockchain technology through a systematic literature review using bibliometric techniques. We present blockchain research on who, when, where, and what. This research also extends the multi-discipline discourse by synthesising how blockchain technology is enacted. We present a benchmarking tool for assessing solutions. Further research topics are also presented

On the Economics of Bitcoin Mining: A Theoretical Framework and Simulation Evidence

The stability of proof-of-work consensus underlying decentralized networks such as Bitcoin relies on an incentive compatible mining design. While theoretically well studied, the empirical composition of the mining process remains largely opaque due to the un-known distribution of miners and technology. This paper proposes a model that leverages innovation-driven convergence in the Bitcoin ecosystem to reconstruct market conditions and study miners’ behavior. Numerical simulations using 10,000 bootstrap samples sup-port the implications of the model. The results quantify considerable variation in miners’ profits and costs and proof consistent with the proposed theory. The estimates suggest that the cost of a capacity majority, and thus the ability to successfully attack the network, can be astonishingly low (e.g., $2.13 million in May 2020) when adverse events coincide. This pronounces the relevance of cyclical patterns when assessing the immutability of proof-of-work consensus

The pricing implications of cryptocurrency mining on global electricity markets : evidence from quantile causality tests

This paper examines the causal interactions between energy consumption due to cryptocurrency mining activity and electricity return and volatility patterns across the power markets in the U.S., U.K. and Europe. We find that the effect is heterogeneous across the different power markets examined, while the effect of mining activity is consistently focused on return volatility. Accordingly, our findings provide robust evidence of the volatility effects of mining activity in power markets, suggesting that the crypto mining-power market nexus primarily entails risk effects, an issue of particular concern for hedgers whose goal is to stabilize energy costs in their operations.https://www.elsevier.com/locate/jcleprohj2023Economic

The effects of crypto-currency miming on environmental sustainability

Şifreli blok zincir teknolojisi kullanılarak üretilen kriptoparalar son 10 yılda piyasa değeri ve işlem hacmi itibariyle gösterdikleri gelişimle finansal piyasalar ve yatırımcılar açısından hem sağladıkları getiri imkânı hem de esnek üretim kabiliyetleriyle önemli fırsatlar sunmakta, küresel ölçekte önemli bir dönüşümü beraberinde getirmektedirler. Bununla birlikte, kripto madenciliği sürecinde gerçekleşen enerji tüketimi, karbon emisyonu ve elektronik atık miktarı önemli çevresel etkiler ortaya çıkarmakta ve ileriye yönelik tehditler oluşturmaktadır. Bu çalışmada, kriptopara madenciliğinde yapılan işlemlerin neden olduğu etkiler global ısınma ve iklim değişikliği de dahil olmak üzere çevresel sürdürülebilirliğe olan etkileri boyutuyla çok yönlü olarak incelenmektedir. Çalışma sonuçları, kriptopara madenciliği sonucu tüketilen enerjinin, gerçekleşen karbon emisyonu ve elektronik atık miktarının artan büyüklükleri itibariyle küresel ısınma, iklim değişikliği ve hava kirliliği gibi önemli çevresel etkileri olduğunu, bu etkilerin azaltılamaması durumunda hem kriptopara piyasalarının hem de çevresel sürdürülebilirliğin olumsuz etkilenebileceğini göstermektedir. Bu etkilerin azaltılabilmesi ve kripto madenciliğinde kullanılan donanımın verimliliğinin artırılabilmesi için yenilikçi adımların atılması, yeni yasal düzenlemelerin getirilmesi, farklı kanıt protokollerinin kullanılması ve yenilenebilir enerji kaynaklarından daha fazla istifade edilmesi gerekmektedir.Cryptocurrencies derived by a cryptographic blockchain technology have shown an impressive growth in market value and trading volume over the last decade, leading to a significant transformation in financial markets. These digital assets do not only produce satisfactory returns for investors but also guarantee quick transfer of ownership by its decentralized, safe, and flexible system. However, the growing popularity of cryptocurrencies also brings several challenges and concerns for environmental sustainability due to high energy consumption, carbon emission and electronic waste generated by crypto-mining process. This study discusses the effects of crypto mining on environmental sustainability, particularly focusing on global warming and climate change. The findings show that crypto-mining has negative effects on climate change and air pollution by its increasing electricity consumption, carbon emission and electronic waste and may seriously influence the sustainability of crypto-markets and environmental eco-system. Thus, policy makers should take innovative actions to increase the efficiency of the hardware used in crypto-mining, introduce minimum standards, impose new regulations i.e., carbon emission tax and encourage increasing use of renewable energy sources for crypto-mining to preserve environmental sustainability