The path to sustainable Bitcoin mining: challenges and barriers

Lashkaripour, Mohammadhossein, Hosseini, Seyedmehdi ORCID: https://orcid.org/0000-0002-9443-3960, Basirian, Elnaz and Bouri, Elie 2025. The path to sustainable Bitcoin mining: challenges and barriers. Energy Economics 147 , 108503. 10.1016/j.eneco.2025.108503 Item availability restricted.

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Abstract

This paper investigates the transition to sustainable Bitcoin mining and the associated challenges. We identify two key channels of negative externalities stemming from the operations of carbon-intensive (“brown”) miners that discourage the adoption of environmentally friendly (“green”) mining practices. First, the lottery-like mechanism of Bitcoin mining prioritizes relative computational power, disregarding the energy source. As a result, the intermittent nature of renewable energy and insufficient infrastructure development place green miners at a disadvantage compared to brown miners. Second, the lack of product differentiation in the Bitcoin ecosystem means that both green and brown miners produce indistinguishable outputs. Consequently, all miners, irrespective of their environmental practices, face penalties from climate-conscious investors and policymakers due to the carbon intensity associated with brown mining operations. Certain policy interventions, such as Pigouvian-like subsidies, could mitigate these externalities and promote sustainable mining practices.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Schools > Business (Including Economics)
Publisher:	Elsevier
ISSN:	0140-9883
Date of First Compliant Deposit:	7 May 2025
Date of Acceptance:	11 April 2025
Last Modified:	02 Jun 2025 09:15
URI:	https://orca.cardiff.ac.uk/id/eprint/178122

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