Which Factors Can Explain the Correlation Between Cryptomining Activities and Environmental Impact? A Theoretical Analysis

Abstract

In 2021, a massive relocation of cryptocurrency mining farms from China to Kazakhstan caused one of the largest energy crises in Asia and Europe. This work aims at an understanding of the current debate of cryptocurrency mining activities on the environment. The review highlights: 1. The existence of a positive relationship between cryptomining activities and the deterioration of environmental quality; 2. The contribution of renewable energies and blockchain algorithms to mitigate the above effects. Main results suggest the need for a supranational institution to monitor the current cryptocurrency production to complement current policies by the European Commission and United Nations.