This paper aims to analyze and compare the ability of bitcoin, gold, and dollar to diversify the risk of traditional market such as crude oil and stock markets. Specifically, we model the linkages between bitcoin, gold, dollar, crude oil, and stock markets using the GARCHâEVTâcopula approach. The results show that the gold market is in the central position among these markets, which is consistent with the status of gold as a major safe asset. Before the outbreak of COVIDâ19, bitcoin and the dollar also had the ability to diversify risks, although less effective than gold. However, during the COVIDâ19 period, gold loses its dominant position and gold, bitcoin, and dollar can no longer act as a hedge. We measure the value at risk (VaR) and expected shortfall (ES) of simulated portfolios constructed based on these five markets and use several backtesting methods to check the validity of the risk measures. The backtesting results show that our model can provide accurate risk measures before and within the COVIDâ19 period, which may help investors and risk managers construct the optimal portfolios.
The applicability of the existing Nigerian laws to the NFTs ecosystem has for a while formed a subject of debate among observers and players in the business. Although relatively new, the NFT industry has proven to be one of the most rewarding of all digital assets in the tech space with millions of people pivoting into the space yearly. According to reports, over $41 billion in cryptocurrency was spent on NFT platforms and approximately $28.6 million wallets traded NFTs only in 2021. Thus, in furtherance of the function of law as a mechanism for establishing acceptable standards in all systems, the authors of this work have examined below, the legal issues and applicable framework of the NFT business in Nigeria. While there may have been many unregulated questions regarding the Nigerian NFTs ecosystem, the authors submitted below that, laws and regulations governing Intellectual Property, Data Privacy and Protection, Taxation, and Cybercrime, among others, can potentially regulate the affairs of those who deal in the NFT space.
We introduce a novel framework for tracking greenhouse gas (GHG) emissions across a fuel supply chain. It facilitates the exchange of emissions inventory data between organizations to determine a products cumulative carbon footprint based on the Life Cycle Assessment (LCA) methodology. It offers a systematic approach to exchange data and overcome challenges in reporting indirect value chain, or scope 3, emissions. We highlight how the tracking system can impact reporting transparency, accuracy and reliability, while also addressing data privacy issues and commercial interests of participating organizations. The framework has been implemented within the Hyperledger Labs Blockchain Carbon Accounting Project using the ERC-1155 multi-token standard. A Net Emissions Token network is used by registered dealers to issue tokens for audited emissions data or carbon offset credits. These are aggregated into non-fungible tokens (NFTs) within the Carbon Tracker network. The NFTs represent unique emissions profiles that are linked to product quantities used to transfer inventory data between organizations. We present stylized examples based on emission performance certification in voluntary markets, cross-border trade, and for performance based financing.
Xiaoyang Shi, Hang Xiao, Weifeng Liu, Xi Chen · 7 authors
The distributed consensus mechanism is the backbone of the rapidly developing blockchain network. Blockchain platforms consume vast amounts of electricity based on the current consensus mechanism of Proof-of-Work (PoW). Here, we point out a different consensus mechanism named Proof-of-Stake (PoS) that can eliminate the extensive energy consumption of the current PoW-based blockchain. We comprehensively elucidate the current and projected energy consumption and carbon footprint of the PoW- and PoS-based Bitcoin and Ethereum blockchain platforms. The model of energy consumption of PoS-based Ethereum blockchain can lead the way toward the prediction of other PoS-based blockchain technologies in the future. With the widespread adoption of blockchain technology, if the current PoW mechanism continues to be employed, the carbon footprint of Bitcoin and Ethereum will push the global temperature above 1.5 °C in this century. However, a PoS-based blockchain can reduce the carbon footprint by 99% compared to the PoW mechanism. The small amount of carbon footprint from PoS-based blockchain could make blockchain an attractive technology in a carbon-constrained future. The study sheds light on the urgency of developing the PoS mechanism to solve the current sustainability problem of blockchain.
Amaç -Bu araĆtırmanın amacı, kripto para piyasasında en bĂŒyĂŒk kapitalizasyona ve en çok iĆlem hacmine sahip kripto para olan Bitcoin'in, volatilitesini en
This study examined how the relationships among the fossil fuel, clean energy stock, gold, and Bitcoin markets have changed since the COVID-19 pandemic took place for hedging the price change risks in the fossil fuel markets. We applied the Bayesian Dynamic Conditional Correlation-Multivariate GARCH (DCC-MGARCH) models using US daily data from 2 January 2019 to 26 February 2021. Our results suggest that the fossil fuel (WTI crude oil and natural gas) and financial markets (clean energy stock, gold, and Bitcoin) generally had negative relationships in 2019 before the pandemic prevailed, but they became positive for a while in mid-2020, alternating between positive (0.8) and negative values (â0.8). As it is known that negative relationships are required among assets to hedge the risk of price changes, this implies that stakeholders need to be cautious in hedging the risk across the fossil fuel and financial markets when a crisis like COVID-19 occurs. However, our study also revealed that such negative relationships only lasted for three to six months, suggesting that the effects of the pandemic were short term and that stakeholders in the fossil fuel markets could cross hedge with the financial markets in the long term.
Alain Aoun, Hussein Ibrahim, Mazen Ghandour, Adrian Ilinca
Global economic growth, demographic explosion, digitization, increased mobility, and greater demand for heating and cooling due to climate change in different world areas are the main drivers for the surge in energy demand. The increase in energy demand is the basis of economic challenges for power companies alongside several socio-economic problems in communities, such as energy poverty, defined as the insufficient coverage of energy needs, especially in the residential sector. Two main strategies are considered to meet this increased demand. The first strategy focuses on new sustainable and eco-friendly modes of power generation, such as renewable energy resources and distributed energy resources. The second strategy is demand-side oriented rather than the supply side. Demand-side management, demand response (DR), and energy efficiency (EE) programs fall under this category. On the other hand, the decentralization and digitization of the energy sector convoyed by the emersion of new technologies such as blockchain, Internet of Things (IoT), and Artificial Intelligence (AI), opened the door to new solutions for the energy demand dilemma. Among these technologies, blockchain has proved itself as a decentralized trading platform between untrusted peers without the involvement of a trusted third party. This newly introduced Peer-to-Peer (P2P) trading model can be used to create a new demand load control model. In this article, the concept of an energy cap and trade demand-side management (DSM) model is introduced and simulated. The introduced DSM model is based on the concept of capping consumersâ monthly energy consumption and rewarding consumers who do not exceed this cap with energy tradeable credits that can be traded using blockchain-based Peer-to-Peer (P2P) energy trading. A model based on 200 households is used to simulate the proposed DSM model and prove that this model can be beneficial to both energy companies and consumers.
Eighteen percent of the worldâs population do not have access to electricity, impeding economic, social, and human development. The electricity access challenge can be attributed to the significant investment gap needed to finance new power projects, requiring new and innovative financing options. Independent Power Projects, funded, built, owned, and operated by the private sector and constituted via a special purpose vehicleâa legal entity whose sole purpose is implementing a power projectâhave become one of the fastest-growing sources of investment in the electricity sector. The limitations of traditional finance sources, including high credit, liquidity, margining, third-party, legal, and process risks, means that funds for these projects are expensive and raised only after a long and arduous process. The present article addresses these challenges by describing a novel decentralized autonomous organization, a blockchain-agnostic special purpose vehicle underpinned by a trio of autonomous mechanismsâmobilization, collateralization, andsettlement. These mechanisms enable seamless finance mobilization for the special purpose vehicle from a location-independent crowd, revenue collection from the electricity buyer in a risk-mitigated manner, and disbursal of eventual project revenues to investors.
The rationality and scientific nature of the emission trading mechanism is the key to the effective implementation of environmental and economic policies. As far as China is concerned, there are phenomena such as information asymmetry, low supervision efficiency, and alienation of government and enterprise behaviors caused by the incomplete mechanism of emission trading in the practice of different pilots. The introduction of blockchain technology can innovate the traditional transaction model and form a decentralized peer-to-peer transaction and a trusted emission trading market. To this end, based on the current emission trading mechanism and the characteristics of blockchain technology, this paper couples the core technologies of blockchain with the functional requirements of application scenarios. Then, an innovative application framework is built based on the consortium blockchain Fabric from three aspects: emission trading supervision, secondary trading market construction, as well as emission trading incentive and punishment mechanisms. Technologies such as the consensus mechanism, smart contract, Merkle tree and asymmetric encryption are comprehensively applied in this process. In the construction of the blockchain framework of the secondary market for emission trading, institutional changes and innovations brought about by the blockchain at various levels are analyzed in terms of participants, transaction processes and the transaction scope. At the same time, smart contract functions and algorithms are designed for the purchase, transfer-out and trading of emission rights, and the operation business logic of the smart contract is analyzed. On the whole, this paper explores the application framework of blockchain technology in the field of emission trading at the macro level, and analyzes the application mechanism of the corresponding technologies of blockchain at each coupling point in the framework at the micro level. The collaborative analysis at the two levels shows that blockchain technology and the requirements of emission trading mechanism can be effectively coupled, and the application of blockchain technology can promote the effective supervision of enterprises' emission behavior, making the processes of the purchase, transfer and transaction of emission rights intelligent and automated, and providing technical support for cross-regional emission trading to reduce transaction costs and management complexity. In addition, the issuance of emission credits based on smart contract will be a new incentive for companies to actively participate in transactions. Based on the above analysis, this paper believes that the innovative application of blockchain technology is of great significance in the promotion of the market-based allocation of element of emission trading and the rational allocation of environmental resources. It will lead to a major breakthrough in the traditional trading system in terms of trading modes, forming a value transmission network of environmental resources between the government and polluters.
Dong Wang, Jiaxing Xuan, Zhiyu Chen, Da Li · 5 authors
With the continuous advancement of the green certificate trading mechanism, information verification needs to span multiple departments, which causes the application process cumbersome and human errors. In order to solve problems of cumbersome issuance process of the renewable energy certificate (REC) and the inflexible pricing mechanism, in this paper, a hybrid REC trading system was proposed based on an permissioned blockchain technology (BT), which combined advantages of the BT and the continuous double auction (CDA). The operation process of the system was introduced in detail, and the view change protocol in the Practical Byzantine Fault Tolerance algorithm was revised according to the characteristics of the system to improve the system stability. The continuous double auction rule was also introduced in the system. And corresponding bidding strategies were designed to maximize the revenue of users (buyer and seller) and transaction probability. The simulation experiment proves that the bidding mechanism can flexibly adjust the REC price according to the supply and demand relationship. At the same time, the effectiveness and feasibility of trading rule and bidding strategy were also verified.
The impact of blockchains on maritime trade has been studied from economic and managerial angles. But their combined study from the legal, economic, and managerial angles has rarely been studied. If the economic stakes are beginning to be identified, the way in which the law defines blockchains is more delicate to understand; the international dimension of maritime transport associated with the various national regulations complicates the analysis. After studying the economic benefits of blockchains on maritime trade we analyzed the legal benefits and the outstanding legal issues. These analyses led to a study of the relationship between the maritime supply chain and blockchains. This study shows that the adoption of this innovative technology by maritime trade actors will have many economic, logistical, and legal consequences that cannot be dissociated and are nevertheless systematically dissociated; but that it is difficult to clearly identify or confirm due to the small number of case studies. JEL Codes: O33, R40
As an important way to reduce emission, forestry carbon sink (FCS) has not been implemented effectively. Therefore, this paper aims to analyze the effectiveness and mechanism of applying blockchain technology in FCS projects by utilizing the differential game model. A Stackelberg differential game model between forest farmers and emission-controlled enterprises (ECEs) is developed to analyze the optimal emission reduction efforts and the optimal trajectory of forest farmers and ECEs before and after introducing blockchain technology. It is found that: (1) At the initial stage of the utilization of blockchain technology, if blockchain technology takes a leading role in stabilizing carbon prices, the ECEs prefer to purchase FCS instead of reducing emissions by their own technology. On the contrary, if blockchain technology takes a leading role in stimulating the vitality of the carbon trading market, ECEs tend to use emission abatement technology to meet the carbon quote requirements. (2) In the later stage, the incentive and stabilizing effects of blockchain technology on carbon prices tend to be balanced, and the emission reduction efforts of ECEs are lower than the efforts before applying blockchain technology. (3) The application of blockchain technology increases forest farmersâ willingness to reduce emissions because of its effection of cost reduction and efficiency improvement. Meanwhile, blockchain technology reduces abatement costs by influencing carbon prices. Therefore, blockchain technology improves forest farmersâ emission reduction efforts on the whole.
Purpose This paper aims to examine the frequency of co-movements and asymmetric dependencies between bitcoin (BTC), gold, Brent crude oil and the US economic policy uncertainty (EPU) index. Design/methodology/approach The authors use a wavelet approach and a quantile-on-quantile regression (QQR) method. Findings The results show a positive interdependence between BTC and commodity price returns at both medium and low frequencies over the sample period. In contrast, the dependence is negative between BTC and EPU index at both medium and low frequencies. Furthermore, the co-movements between markets are more pronounced during crises. The results show that strategic commodities and EPU index have the ability to predict BTC price returns at both medium- and long-terms. The QQR method reveals that higher gold returns tend to predict higher/lower BTC returns when the market is in a bullish/bearish state. Moreover, lower gold returns tend to predict lower (higher) BTC returns when the market is in a bearish (bullish) state (positive (negative) relationship). The lower Brent returns tend to predict higher/lower BTC returns when the market is in a bullish/bearish state. High Brent quantiles tend to predict the lower BTC returns in its extremely bearish states. Finally, higher and lower EPU changes tend to predict lower and higher BTC returns when the market is in a bearish/bullish state (negative relationship). Originality/value There is generally a lack of understanding of the linkages between BTC, gold, oil and uncertainty index across multiple frequencies. This is, as far as the authors know, the first attempt to apply both the wavelet approach and a QQR method to examine the multiscale linkages among markets under study. The findings should encourage the relevant policymakers to consider these co-movements which vary over time and in duration when setting up regulations that deem to enhance the market efficiency.
Abstract We study the economic determinants of transaction fees in the Ethereum blockchain. We estimate an empirical model based on queueing theory and analyze the factors determining the âgas priceâ (transaction cost per unit of service, âgasâ). Using blockâ and transactionâlevel data from the Ethereum blockchain, we show that changes in service demand significantly affect the gas priceâwhen there is high block utilization, perâunit fees increase on average, with strong nonlinear effect above 90% utilization. The transaction type is another important factorâlarger fraction of regular transactions (direct transfers between users) is associated with higher gas price.