Bitcoin’s energy consumption: Is it the Achilles heel to miner’s revenue?

Debojyoti Das () and Anupam Dutta

Economics Letters, 2020, vol. 186, issue C

Abstract: In this paper, we add a new dimension to the cryptocurrency literature by examining the relationship between Bitcoin’s energy consumption and miner’s revenue. By resorting to quantile and Markov regime switching regression, we report a negative association between these variables. Further, the negative impact is strongly significant when the miner’s revenues are low and volatile. Thus, the higher energy consumption in the wake of escalating global energy costs amid bearish market sentiments impedes the miners to break-even. Hence, it would not be viable to sustain the business unless cheap energy sources and efficient mining hardware are relied upon.

Keywords: Bitcoin; Energy; Quantile regression; Markov regime switching (search for similar items in EconPapers)
JEL-codes: C22 C3 C5 G1 G11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519302526

DOI: 10.1016/j.econlet.2019.108530

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