Vortrag Jona Stinner „Bitcoin, Blockchain and the Green Transformation”

Abstract:
The Bitcoin network imposes significant external costs on society, including high CO2-emissions and electronic waste, which rival those of entire nations. However, some studies argue that these externalities are justifiable, claiming that cryptocurrency mining thrives sustainable energy production by monetizing surplus energy. We examine this trade-off from an economic standpoint, addressing three key questions: Does the use of surplus energy mitigate Bitcoin’s externalities? Are policy interventions such as carbon credits effective? And does cryptocurrency mining ultimately benefit or harm society? Our model shows that while surplus energy lowers the network’s CO2-emissions, it simultaneously incentivizes increased mining activity, leading to greater e-waste that may offset environmental gains. Moreover, we find that carbon credits, when implemented multilaterally, can effectively reduce total externalities. We conclude with a discussion of the broader societal implications, emphasizing the dual role of Bitcoin mining in fostering the short-term transition but hindering the long-term transition to a sustainable energy system. Our study extends the literature on the external effects of technological progress (e.g., Acemoglu et al., 2024) to a novel market design with inelastic output.