CRYPTOCURRENCY AND CLIMATE CHANGE: AN OVERVIEW

Abstract

Although cryptocurrencies have become a cutting-edge way to conduct financial 
transactions online in recent years, experts are concerned about how they may affect the 
environment. The massive demand that cryptocurrencies exert on the energy grid raises 
carbon emissions, which in turn contributes to the overall impacts of global warming. 
However, future use of blockchain technology—which drives bitcoin—should be taken into 
account. The use of cryptocurrencies poses a risk to the environment because of their potential 
to be widely incorporated into existing technologies and the significant carbon footprint left 
by such a tiny percentage of worldwide cashless transactions. With an emphasis on climate 
change (global warming), this research investigates how cryptocurrencies affect the 
environment. Even though the future of bitcoin is presently uncertain, it can be predicted that 
if its pace of adoption is increased, its power consumption might generate enough emissions 
to cause global warming to exceed 2°C in a few decades. The study suggests that in order to 
prevent the potentially depressing effects of 2OC of global warming, future cryptocurrency 
development should analytically aim to lower power demand.