Cryptocurrencies, Energy Consumption and Economic Impact

Abstract

The significant impact of cryptocurrency mining activities on energy consumption and the environment has made it one of the focal points for global sustainable development. This review paper provides a synthesis and overview of the latest literature on the sustainability of cryptocurrency from the past five years. Academic studies on the environmental and economic impacts of cryptocurrency currently concentrate on the following aspects: Firstly, the substantial energy consumption involved in mining activities could lead to significant carbon dioxide emissions, potentially weakening the support of other economic sectors, especially renewable energy projects, thereby harming the comprehensive and long-term economic development and sustainability. Secondly, the hardware required for mining often has a short lifespan, leading to frequent replacements that may produce a large amount of electronic waste, intensifying environmental pressure, and raising concerns of water and soil pollution. Finally, policies and regulation play a crucial role in reducing the environmental impact of mining activities. Governments need to take restrictive measures to encourage the use of renewable energies to ensure the environmental sustainability of mining activities. Meanwhile, technological innovation is considered a crucial means to alleviate the environmental effects of mining, with the development of more efficient mining hardware and energy-saving consensus mechanisms being of great importance. By analyzing the challenges and opportunities in these areas, we hope to provide a clear perspective on the complex relationship between cryptocurrency mining activities and environmental sustainability, offering new insights for future research.