Andrew L. Goodkind, Robert P. Berrens, Benjamin A. Jones
Cryptocurrencies, such as Bitcoin (BTC), based on the proof-of-work mining production scheme create significant social costs. This analysis monetarily estimates the health and climate damages of BTC mining in the United States (US) from September 2019 to December 2021, and then compares these damages to BTCâs market price. We further show the spatial dispersion of BTCâs âsocial damage-to-market priceâ ratio across US states. If this benchmark ratio is >1, then it is a clear indicator of an unsustainable technology. Results indicate significant geographic hotspots and periods when BTC mining generates social costs that exceed the market priceâi.e. instances where BTC is underwater. On average, for the US, damages represented 49% of the value of the coins generated and BTC was underwater on approximately one-quarter of days between September 2019 and December 2021. Several US states have average damages that exceed the value of each BTC mined.
There is a growing interest in understanding the energy and environmental footprint of digital currencies, specifically in cryptocurrencies such as Bitcoin and Ethereum. These cryptocurrencies are operated by a geographically distributed network of computing nodes, making it hard to accurately estimate their energy consumption. Existing studies, both in academia and industry, attempt to model the cryptocurrencies energy consumption often based on a number of assumptions for instance about the hardware in use or geographic distribution of the computing nodes. A number of these studies has already been widely criticized for their design choices and subsequent over or under-estimation of the energy use. In this study, we evaluate the reliability of prior models and estimates by leveraging existing scientific literature from fields cognizant of blockchain such as social energy sciences and information systems. We first design a quality assessment framework based on existing research, we then conduct a systematic literature review examining scientific and non-academic literature demonstrating common issues and potential avenues of addressing these issues. Our goal with this article is to to advance the field by promoting scientific rigor in studies focusing on Blockchain's energy footprint. To that end, we provide a novel set of codes of conduct for the five most widely used research methodologies: quantitative energy modeling, literature reviews, data analysis \& statistics, case studies, and experiments. We envision that these codes of conduct would assist in standardizing the design and assessment of studies focusing on blockchain-based systems' energy and environmental footprint.
With the control of the cryptocurrency market in environmental protection, investors pay attention to the risk conduction mechanism between energy consumption and the Bitcoin market. This paper applies quantile connectedness to analyse the overall situation and dynamic evolution of information spillover in the system of the Bitcoin market. The results show that the hashrate and electricity demand are the primary sources of risk in the information network, and their fluctuations have intensified the risk spillover effects in the system. In addition, the spillover level is more prominent in extreme cases, which means the information linkage in the system is integrated. The spillover effect of each variable fluctuates and is uncertain with time. This helps in the sustainable development of Bitcoin and guides the government's policy development and supervision of cryptocurrencies. The risk infection path helps prevent the risk of infection in the Bitcoin market and improves the sustainability of the encrypted market.
Florentina Magda Enescu, Fernando Georgel BĂźrleanu, Maria Simona RaboacÄ, Nicu Bizon · 5 authors
This paper presents a comprehensive review of the technical aspects and challenges in existing public transport services. This review highlights the challenges and solutions for the main subsystems of public transport services, being focused on the influence of public transportation in an urban area with high demographics to identify solutions based on blockchain technology for future development of the current management platforms. More than 2000 research papers, published since 2018 and until now, have been analyzed in Web of Science, Scopus, and ScienceDirect. The keywords used for the analysis of blockchain integration in public transport are related to technology, services, management, the use of electric vehicles, and the impact of public transport on the environment. In this research, we analyzed why there is a need for integrating the blockchain technologies in public transport.
Karen Mould, FĂĄbio Silva, S. Knott, Brian OâRegan
Solar and wind energy technologies, due to their nature of weather dependency, have been recognized as not the complete solution for the renewable energy transition. Creating a solution for the short fall is empirical if we are to remove the dependency on fossil fuels and reach net zero targets. The production of hydrogen, biogas and other gases can be produced sustainably, which can also allow for the utilization of waste materials or the ability to store energy and allow a greater positive impact on our environment. However, production of these gases is not always as transparent or environmentally friendly as perceived, so with the aid of certification and blockchain, we can create a system that can guarantee their environmentally positive origin, and ultimately help assist the transition to a greener future. This paper explores the varying production methods, with consideration to their environmental impact, and the implications of the use of certificates and blockchain to monitor production, trade and usage.
Purpose The authors attempt to explore fat tails and network interlinkages of oil prices and the six largest cryptocurrencies from 1st January 2018 and 1st August 2021. The authors also investigate the influences of the COVID-19 pandemic on these network interlinkages. Design/methodology/approach The authors follow Diebold and Yilmaz (2012) to calculate the spillover index the dynamic correlation coefficient model firstly employed by Engle (2002) to study how the volatility of oil prices are transmitted to those of cryptocurrency return and liquidity and vice versa. Findings The results confirm the presence of time-varying interlinkages between the volatilities of the oil market and the cryptocurrency market. Notably, uncertain events like the COVID-19 health crisis significantly influence the time-varying interlinkages they augment dramatically during the COVID-19 health crisis. The turbulence of the cryptocurrency market, especially from Bitcoin and Ethereum, significantly impacts those of the oil market. The role of the oil market in transmitting the effect of respective shocks to the cryptocurrency market, on the other hand, is time-varying, which is only reported when the COVID-19 pandemic first appeared at the beginning of 2020. The turbulence of the cryptocurrency market in the system is greatly explained by themself rather than a transmission mechanism of shocks to the oil market. Practical implications Insightful knowledge about key antecedents of contagion among these markets also help policymakers design adequate policies to reduce these markets' vulnerabilities and minimize the spread of risk or uncertainty across these markets. Originality/value The most significant benefit of the approach is how simple it is to calculate net pairwise connectivity, which identifies transmission channels between these commodity and financial markets. The authors are also the first to use the quasi-maximum likelihood (QML) estimator to estimate the DCC model to measure the volatility spillover index to reflect the level of interdependence between the different markets. By using a daily and up to date database, the authors can observe the role of each market in transmitting and receiving the shocks between two different sub-periods: (1) before and (2) during the COVID-19 pandemic crisis.
Benjamin A. Jones, Andrew L. Goodkind, Robert P. Berrens
Abstract This paper provides economic estimates of the energy-related climate damages of mining Bitcoin (BTC), the dominant proof-of-work cryptocurrency. We provide three sustainability criteria for signaling when the climate damages may be unsustainable. BTC mining fails all three. We find that for 2016â2021: (i) per coin climate damages from BTC were increasing, rather than decreasing with industry maturation; (ii) during certain time periods, BTC climate damages exceed the price of each coin created; (iii) on average, each $1 in BTC market value created was responsible for $0.35 in global climate damages, which as a share of market value is in the range between beef production and crude oil burned as gasoline, and an order-of-magnitude higher than wind and solar power. Taken together, these results represent a set of sustainability red flags. While proponents have offered BTC as representing âdigital gold,â from a climate damages perspective it operates more like âdigital crudeâ.
In this paper we analyze dynamic demand elasticity for Bitcoin and Ethereum in terms of price, transaction fees, and energy usage. We find that while both BTC and ETH have significantly positive price elasticities, transaction fee elasticity is negative and positive for BTC and ETH respectively, indicating differences in potential uses for these cryptocurrencies.
Tehreem Ashfaq, Muhammad Irfan Khalid, Gauhar Ali, Mohammad El Affendi · 10 authors
In this paper, a secure energy trading mechanism based on blockchain technology is proposed. The proposed model deals with energy trading problems such as insecure energy trading and inefficient charging mechanisms for electric vehicles (EVs) in a vehicular energy network (VEN). EVs face two major problems: finding an optimal charging station and calculating the exact amount of energy required to reach the selected charging station. Moreover, in traditional trading approaches, centralized parties are involved in energy trading, which leads to various issues such as increased computational cost, increased computational delay, data tempering and a single point of failure. Furthermore, EVs face various energy challenges, such as imbalanced load supply and fluctuations in voltage level. Therefore, a demand-response (DR) pricing strategy enables EV users to flatten load curves and efficiently adjust electricity usage. In this work, communication between EVs and aggregators is efficiently performed through blockchain. Moreover, a branching concept is involved in the proposed system, which divides EV data into two different branches: a Fraud Chain (F-chain) and an Integrity Chain (I-chain). The proposed branching mechanism helps solve the storage problem and reduces computational time. Moreover, an attacker model is designed to check the robustness of the proposed system against double-spending and replay attacks. Security analysis of the proposed smart contract is also given in this paper. Simulation results show that the proposed work efficiently reduces the charging cost and time in a VEN.
Recently, Digital money is booming, and bitcoin shows potential in the field of investment as a representative of digital currency. According to modern portfolio theory, most of the investors are absolute risk-averter, and a diversified portfolio can effectively reduce the risk. So investors usually combine bitcoin with other assets to reduce non-systemic risks. Therefore, it is of great importance to formulate a feasible portfolio that can make steady returns for investors. For this reason, we build models to find suitable strategy to quantify the proportion of assets invested so that investors can make optimal investment decisions. We measure the return, risk, and efficiency of risk modelâs portfolio by sharpe ratio. And based on DEA method, the multi-stage portfolio with V-type transaction cost is evaluated by comparing the portfolio from risk model with the portfolio by applying DEA method, and finally we prove that the strategy is the optimal one. Finally, the advantages and disadvantages of this model are analyzed and summarized.
Climate change has raised an alarm for world to ponder about and if not stopped can cause serious repercussions. A feasible solution to alleviate greenhouse gas emissions is via a mechanism that is laid out in Kyoto protocol in 1997. It was signed by close to 192 nations thus creating a system to monetize carbon emissions with an aim to build an authority over it. There have been efforts to build a system in previous decade too but there have been certain shortcomings. The major challenges which exist are data manipulation, lack of transparency and substantial costs. So we have come up with the idea of Blockchain which will build a carbon credit ecosystem thus guaranteeing us security, transparency, accessibility to the standardized carbon markets. We will also be using sensors to automate the data to out consortium.
As traditional power grid is restructuring into smart grid, the concept of peer-to-peer electricity market is becoming a topic of immense interest among the researchers. With this blockchain enabled electricity trading platform has been gaining momentum owing to its capability to provide secure transactions. Work has been reported in recent times employing blockchain technology for implementing decentralized electricity marketing. Most of the work focuses on designing electricity marketing rules only on the smart contract. In the presented work a neural network based solar and wind power prediction model is shown working in tandem with blockchain based simple auction peer-to-peer electricity marketing mechanism. This gives direct advantage to the prosumers to auction their surplus power in day ahead marketing by having right knowledge of solar and wind power prediction of their plant. This reduces risk factor for prosumer paying penalty in case the promised energy delivery is not fulfilled and at the same time load to demand balance can be maintained. A smart contract for peer-to-peer electricity marketing rules has been implemented on Ethereum blockchain platform and deployed on Ropsten Test Network. The neural network based solar and wind power prediction model has been designed on MATLAB R2018b. At the end a demonstration is done considering a scenario of prosumer auctioning solar and wind power to different consumers on blockchain Ropsten test network. This research work does not consider the power distribution network constraints.
Laura Cirrincione, Maria La Gennusa, Giorgia Peri, Gianfranco Rizzo · 5 authors
Decarbonizing urban environments and reducing their energy consumption is one of modern society biggest commitments. In this regard, both the scientific community and international governments have been giving special consideration on improving the energy-environmental performance of mostly single buildings; recently the focus has been shifting towards a broader Positive Energy District (PED)/ Energy Community (EC) vision, from small clustered group of buildings to neighborhoods up until urban settlements. In this respect, integrating the use of renewable energy resources (RES) and actively involving building users can have a significant environmental impact on local areas. Within this framework, this work discusses the possibility of employing an innovative blockchain-based approach for the energy interaction among buildings. The blockchain technology can, in fact, be useful in managing such scenarios since it would allow to, not only consider buildings occupants behaviors, but also take into account concernings regarding the need for transparency, engagement, environmental and human health benefits, as well as the stakeholders role in the interaction/integration between PEDs/ECs and local/national electricity systems.
Environmental imperatives and global energy supply crisis are driving interests in the renewable electricity industry. Yet, the revenue risks of renewable generators make it challenging for them to attract finance from traditional investors. Several mechanisms have been proposed to minimize these risks but have their limitations. Blockchain smart contract arrangements have emerged as a new marketplace, addressing the shortcomings of these traditional electricity hedging mechanisms. However, they have their peculiar challenges, potentially impeding their mainstream adoption in the renewable electricity industry. Hence, this paper develops a novel taxonomy of the risks and challenges of embracing blockchain smart contracts in facilitating renewable electricity transactions. Examining these issues indicates that the adoption of blockchain smart contracts in the renewable energy industry can be facilitated by cooperation and partnerships between technology developers and researchers, renewable energy companies, as well as governments.
Cemal Zehir, Melike Zehir, Alex Borodin, Z. F. Mamedov · 5 authors
Blockchain technology has emerging areas of deployment in diverse sectors and use cases. In this study, several potential application areas of blockchain with promising benefits have been identified in the natural gas industry. There is no single solution that can address different challenges and meet disparate requirements. Therefore, it is important to understand the needs of the natural gas industry and propose appropriate blockchain solutions. Moreover, in the literature, there is a lack of detailed case studies involving industrial experts from the natural gas sector. Expert opinion can be useful for prioritizing the most needed or expected blockchain application areas among several options. By considering privacy, authentication, speed, security, energy consumption, and costs, suitable blockchain types and consensus mechanisms can be determined. This study presents one of the first detailed case studies for tailored applications of blockchain in the natural gas industry. Through a two-staged semi-structured interview with executives from SOCAR Azerbaijan, the most important blockchain application areas and operational requirements were identified. Furthermore, the most suitable blockchain solutions that can address application-specific conditions and needs were determined. This study both, develops a replicable and reliable methodology to conduct detailed blockchain implementation case studies in the natural gas industry and various other sectors, and provides detailed insights into the primary application areas, operational expectationsârequirements, and implementation challenges specific to each application.
To achieve the goal of carbon neutrality, many countries have established regional carbon emission trading markets and tried to build a low-carbon economic system. At present, the implementation of carbon emission trading and low-carbon economic systems faces many challenges such as manipulation, corruption, opacity, lack of trust, and lack of data tracking means. The application of blockchain technology can perfectly solve the above problems. However, the data recorded on a blockchain are often multi-type and heterogeneous, and users at different levels such as regulators, enterprises, and consumers have different requirements for data types and granularity. This requires a quick and trustworthy method for monitoring the carbon footprint of enterprises and products. In this paper, the carbon footprint traceability of enterprises and products is taken as an application scenario, and the distributed traceability concept of "traceability off the chain and verification on the chain" is adopted. By reconstructing the pointer of the file structure of the distributed storage, an interactive traceability structure supporting type filtering is constructed, which enables fast retrieval and locating of carbon emission data in the mixed data on the chain. The experimental results show that using the interactive traceability structure that supports type filtering for traceability not only releases the computing power of full nodes but also greatly improves the traceability efficiency of the long-span transaction chain. The proposed carbon footprint traceability system can rapidly trace and track data on an enterprise's and a product's carbon footprint, as well as meet the needs of users at all levels for traceability. It also offers more advantages when handling large amounts of data requests.
The use of blockchain technology has increased dramatically in the past decade. Blockchain continues to develop, and new functions and capabilities continue to develop. Although the use of this technology began with cryptocurrency, it has been extended to other areas that can benefit from a shared and secure ledger. As an important technology of energy digitization, blockchain has the characteristics of distributed computing, storage, level data sharing, sharing, openness, transparency, tamperability and continuity, and can provide technical support for energy business digitization. Put forward the concept of blockchain breaking the Bureau of energy digital economy, and analyze the role of blockchain in building a new production relationship of energy digital economy from three aspects: ownership of means of production, new production relationship and product distribution form.
Moritz Platt, Stephen Ojeka, Andreea-Elena DrÄgnoiu, Oserere Ejemen Ibelegbu · 7 authors
Abstract Decentralized cryptocurrency networks, notably those with high energy demand, have faced significant criticism and subsequent regulatory scrutiny. Despite these concerns, policy interventions targeting cryptocurrency operations in the pursuit of sustainability have largely been ineffective. Some were abandoned for fear of jeopardizing innovation, whereas others failed due to the highly globalized nature of blockchain systems. In search of a more effective angle for energy policy measures, this study adopts a consumer-centric perspective, examining the sentiments of Nigerian cryptocurrency users ($n=158$) toward Bitcoinâs sustainability, a representative cryptocurrency known for its high electricity demand. Three main findings emerged: 1) Even among those self-identifying as highly knowledgeable, most considerably underestimated Bitcoinâs electricity consumption. 2) Participants with a more accurate understanding of Bitcoinâs energy demand were more inclined to support sustainability measures. 3) Most of this supportive cohort viewed private entities as the primary stakeholders for implementing such measures. Given these findings, we suggest that consumer education should be at the forefront of policy initiatives aimed at cryptocurrency sustainability.
Uyikumhe Damisa, Peter Olabisi Oluseyi, Nnamdi Nwulu
Inadequate gas supply is partly responsible for the energy shortfall experienced in some energy-poor nations. Favorable market conditions would boost investment in the gas supply sector; hence, we propose a blockchain-based fair, transparent, and secure gas trading scheme that facilitates peer-to-peer trading of gas. The scheme is developed using an Ethereum-based smart contract that receives offers from gas suppliers and bid(s) from the thermal plant operator. Giving priority to the cheapest offers, the smart contract determines the winning suppliers. This paper also proposes an economic dispatch model for gas-deficient plants. Conventional economic dispatch seeks to satisfy electric load demand whilst minimizing the total gas cost of generating units. Implicit in its formulation is the assumption that gas supply to generating units is sufficient to satisfy available demand. In energy poor nations, this is hardly the case as there is often inadequate gas supply and conventional economic dispatch is of little practical value. The proposed economic dispatch modelâs objective function maximizes the quantity of available gas and determines the optimal power output of each generating unit. The mathematical formulation is verified using data from the Egbin thermal station which is the largest thermal station in Nigeria and is solved using the General Algebraic Modeling System (GAMS). Obtained results indicate the viability of the novel approach as it results in a net power gain of 35 MW. On the other hand, the smart contract proved effective in accurately selecting winning suppliers and making payment.
Adam Sipthorpe, Sabine Brink, Tyler Van Leeuwen, Iain Staffell
Carbon markets could hasten climate change mitigation by driving investment towards efficient decarbonization activities, but they face problems around trust, transparency, and uptake. Blockchain offers a foundational technology upon which new carbon markets can be built which address these shortcomings. This sector is still nascent, fragmented, and clouded by technology hype, all of which obscures objective judgement of its performance and suitability. Here, we survey the current blockchain ecosystem, identifying 39 organizations that are developing blockchain solutions for carbon markets across four use cases: emissions-trading schemes, voluntary carbon markets, Article 6 of the Paris Agreement, and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). We develop and apply a technology readiness level (TRL) scale, and we find that most projects are still proofs of concept (TRL †3); however, one system has now reached maturity (TRL 9). Addressing the common barriers that face developers could allow more blockchain solutions to mature and potentially facilitate globalized carbon markets with greater efficiency, transparency, and accessibility.