CRYPTOCURRENCY AND CLIMATE CHANGE: AN OVERVIEW

Abstract

Cryptocurrencies in recent years, have emerged as an innovative means of carrying out online financial transactions, but concerns have been raised among experts about their impact on our environmental. Cryptocurrencies place enormous demand on the energy system, and this increases carbon emissions which sequentially adds up to the overall effects of global warming. However, the technology that powers bitcoin (blockchain) should be considered for future adoption. The environmental hazard regarding cryptocurrency usage stems from the large carbon footprint left by such small share of global cashless transactions, and its potential to be broadly integrated into current technologies. This study examines the impact of cryptocurrency on the environment with its focus on climate change (Global warming). Although the fate of bitcoin is currently unpredictable, it can be projected that if its rate of adoption is accelerated, its electricity demand is capable of producing sufficient emissions to surpass 2C of global warming in a few decades. The study recommends that further development in cryptocurrencies should analytically aim to reduce power demand so as to avoid the potentially demoralizing consequences of 2 O C of global warming.