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    Rights statement: This is the peer reviewed version of the following article:Polemis, ML, Tsionas, MG. The environmental consequences of blockchain technology: A Bayesian quantile cointegration analysis for Bitcoin. Int J Fin Econ. 2021; 1– 20. https://doi.org/10.1002/ijfe.2496 which has been published in final form at https://onlinelibrary.wiley.com/doi/10.1002/ijfe.2496t This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

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    Embargo ends: 2/02/23

    Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License

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The environmental consequences of blockchain technology: A Bayesian quantile cointegration analysis for Bitcoin

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E-pub ahead of print
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<mark>Journal publication date</mark>2/02/2021
<mark>Journal</mark>International Journal of Finance and Economics
Publication StatusE-pub ahead of print
Early online date2/02/21
<mark>Original language</mark>English

Abstract

In recent years, there is a widespread belief among researchers and academicians that Bitcoin usage is imposing an additional burden on the environment inducing climate change. Although several studies have focussed on issues related to the energy consumption of the basic cryptocurrencies, an open question remains regarding the environmental depiction of Bitcoin. By resorting to Bayesian analysis and quantile cointegrated vector autoregression (CQVAR), this study seeks to disentangle the driving forces that shape the carbon footprint of Bitcoin. The sample used in the empirical analysis consists of a daily panel dataset covering 50 countries over the period 2016–2018. The empirical findings corroborate a causal effect between the use of Bitcoin and its underlying carbon dioxide emissions generated by the increasing energy load. The CQVAR is associated with positive marginal posterior means for most of the covariates of the model across all the estimated quantiles. In contrast, there is a negative and statistically significant relationship between Bitcoin miner's revenue and carbon emissions, uncovering a multimodal distribution pattern of the marginal posterior densities which is stronger at higher than in lower quantiles. This finding suggests that the lower (higher) miner's Bitcoin revenues, the more abrupt (gradual) the effect on environmental degradation. Therefore, a sustainable energy strategy focussing on the penetration of renewable energy sources along with the use of energy-efficient mining hardware will alleviate the carbon footprint of Bitcoin.

Bibliographic note

This is the peer reviewed version of the following article:Polemis, ML, Tsionas, MG. The environmental consequences of blockchain technology: A Bayesian quantile cointegration analysis for Bitcoin. Int J Fin Econ. 2021; 1– 20. https://doi.org/10.1002/ijfe.2496 which has been published in final form at https://onlinelibrary.wiley.com/doi/10.1002/ijfe.2496t This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.