The transaction behavior of cryptocurrency and electricity consumption

Mingbo Zheng, Gen-Fu Feng, Xinxin Zhao and Chun-Ping Chang ()
Additional contact information
Mingbo Zheng: Chang’an University
Gen-Fu Feng: Xi’an Jiaotong University
Xinxin Zhao: Xi’an Jiaotong University
Chun-Ping Chang: Shih Chien University

Financial Innovation, 2023, vol. 9, issue 1, 1-18

Abstract: Abstract Rapidly increasing cryptocurrency prices have encouraged cryptocurrency miners to participate in cryptocurrency production, increasing network hashrates and electricity consumption. Growth in network hashrates has further crowded out small cryptocurrency investors owing to the heightened costs of mining hardware and electricity. These changes prompt cryptocurrency miners to become new investors, leading to cryptocurrency price increases. The potential bidirectional relationship between cryptocurrency price and electricity consumption remains unidentified. Hence, this research thus utilizes July 31 2015–July 12 2019 data from 13 cryptocurrencies to investigate the short- and long-run causal effects between cryptocurrency transaction and electricity consumption. Particularly, we consider structural breaks induced by external shocks through stationary analysis and comovement relationships. Over the examined time period, we found that the series of cryptocurrency transaction and electricity consumption gradually returns to mean convergence after undergoing daily shocks, with prices trending together with hashrates. Transaction fluctuations exert both a temporary effect and permanent influence on electricity consumption. Therefore, owing to the computational power deployed to wherever high profit is found, transactions are vital determinants of electricity consumption.

Keywords: Transaction behavior; Electricity consumption; Cryptocurrency; Comovement (search for similar items in EconPapers)
JEL-codes: E31 G12 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://link.springer.com/10.1186/s40854-023-00449-7 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:fininn:v:9:y:2023:i:1:d:10.1186_s40854-023-00449-7

Ordering information: This journal article can be ordered from
http://www.springer. ... nomics/journal/40589

DOI: 10.1186/s40854-023-00449-7

Access Statistics for this article

Financial Innovation is currently edited by J. Leon Zhao and Zongyi

More articles in Financial Innovation from Springer, Southwestern University of Finance and Economics
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().