International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)

Abstract

Sustainability of the crypto-monetary Blockchain : Estimation of energy consumption using the economic method

Author(s): Mamadou MBAYE

In the booming field of blockchain technology, particularly in the context of cryptocurrencies, sustainability has become a major concern, mainly due to the significant energy consumption at the level of mining nodes. This article focuses on understanding the relationship between economic incentives in transactions, such as profitability, and the resulting energy expenditures, particularly in networks that use energy-intensive proof-of-work (PoW) mechanisms. Our study presents an accessible approach to estimate this consumption in crypto-monetary blockchain mining. Our model correlates energy consumption with economic variables such as cryptocurrency price, operational costs and mining hardware efficiency. By analyzing miners' income and the proportion of this income spent on electricity, we estimate overall energy consumption. This method allows for a more dynamic understanding of energy demand, reflecting real-time changes in market conditions. Our results suggest that the economic approach offers a viable alternative to traditional technical analyzes of energy consumption in blockchain networks. This methodology not only sheds light on the current environmental impact of cryptocurrencies, but also provides a framework for predicting future trends. The study aims to contribute to the ongoing discourse on blockchain sustainability, by offering insights that promote more energy-efficient blockchain technologies.

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