Crypto Mining Research Articles

The Impact of Cryptocurrency Exposure on Corporate Tax Avoidance Among US Listed Companies

This study examined the association between corporate cryptocurrency activities and tax avoidance outcomes, utilizing data from US public firms covering the period from 2015 to 2023. Financial data were sourced from Compustat, while details regarding cryptocurrency activities were manually extracted from 10-K and 10-Q filings. Our analysis employed a fixed-effects regression model to examine the impact of these activities on cash effective tax rates (ETR). The findings indicate that firms engaged in cryptocurrency activities tend to have a lower ETR compared with those without such involvement. Notably, this effect was predominantly observed in companies directly engaged in cryptocurrency activities, such as accepting cryptocurrency as a payment method or actively trading cryptocurrency on an exchange platform. In contrast, firms involved in crypto mining or initial coin offerings did not exhibit a similar association. Our findings offer significant regulatory insights for governance bodies concerned with the implications of corporate cryptocurrency activities on tax strategies.

The legal regime for cryptocurrencies in Kazakhstan and impossible control of their circulation

Development of a legal framework for cryptocurrencies in Kazakhstan is described in this article: from very first steps in 2018 when financial intermediaries were just warned from use of Bitcoins and alike in their transactions to prohibition of their circulation established into 2020, with cancellation of the prohibition and strengthening regulation of crypto mining in 2023. Authors show that neither existence nor absence of a legislative restriction of cryptocurrencies’ circulation can help the State to control respective turnover. Respectively, no efficient solution can be said existing to both support a public order and protect individual property rights to cryptocurrencies. Keywords: Republic of Kazakhstan, cryptocurrency, Law on Informatisation, digital assets, AIFC, digital mining, regulation, legal framework.

ANALYSIS OF THE IMPACT OF CRYPTO TRADING ON CARBON EMISSIONS USING PATH ANALYSIS

In parallel with the growing interest in cryptocurrencies, the relationship between crypto trading and CO2 is critical to drive financial markets and environmental sustainability efforts. The aim of this study is to analyse the impact of crypto trading on carbon emissions (CO2) through the mediating roles of international trade and energy use. Within the scope of the study, path analysis was carried out using the 2007-2021 period data of the top 20 countries with high crypto trade volume. A model proposal was presented to examine the relationships between the variables used in the study and the necessary analyses were carried out. The results of the analysis show that crypto trade volume has a positive and significant effect on carbon emissions. It is also concluded that international trade and energy use mediate the relationship between crypto trade and carbon emissions. It is seen that crypto mining activities and cryptocurrencies lead to an increase in energy use and environmental impacts. At this point, it is important for countries to switch to renewable energy sources and to regularly report and monitor the impact of cryptocurrency mining activities on carbon emissions.

Understanding the market potential of crypto mining with quantum mechanics and golden cut-based picture fuzzy rough sets

Significant improvements should be made to increase the market potential of crypto mining. However, it is not financially feasible to make too many improvements because all actions lead to cost increases. In this context, it is necessary to determine the factors that most affect this process. Accordingly, the purpose of this study is to understand the main indicators to improve the market potential of crypto mining activities. Therefore, the main research question of this study is to identify which factors should be prioritized while generating appropriate strategies to increase these activities. In this context, a new model has been constructed to answer this question. First, significant indicators are identified based on the literature evaluation. After that, these factors are weighted via quantum picture fuzzy rough set-based M-SWARA. The main contribution of this study is the generation of a new decision-making model to understand the key issues related to the market potential of the crypto mining activities. The M-SWARA model is taken into consideration for criteria weighting. Owing to this issue, the causal relationships between the items can be identified. The findings demonstrate that reducing energy costs emerges as the most important factor for improving the market potential of the crypto mining industry. Furthermore, technological developments also play an important role in this regard.

Current analysis of cryptocurrency mining industry

In this regard the key factor determining the success of the mining industry is the cost of electricity. By understanding the risks associated with crypto mining industry. The method is based on systemic literature review and bibliometric analysis exploring keyword “bitcoin mining”. This review paper studies 50 papers for the period of 2019–2023. The results propose recommendations for crypto miners. Currently, the results confirm that bitcoin mainly depends on the consumption of inexpensive electricity. Consequently, the bitcoin network predominantly uses energy in regions where it is abundant and cannot be stored or exported. Most miners rely on electricity generated from hydroelectric power plants, geysers and geothermal sources, which are not easy to transport or store. Bitcoin will continue to look for such cost-effective and underutilized energy sources, as mining in urban areas or industrial centers will remain financially unviable. If the price of bitcoin stabilizes and a sufficient number of miners enter the market, it is quite possible that in the near future we may witness a fivefold increase in their energy consumption.

A Comprehensive Review of Behind-the-Meter Distributed Energy Resources Load Forecasting: Models, Challenges, and Emerging Technologies

Behind the meter (BTM) distributed energy resources (DERs), such as photovoltaic (PV) systems, battery energy storage systems (BESSs), and electric vehicle (EV) charging infrastructures, have experienced significant growth in residential locations. Accurate load forecasting is crucial for the efficient operation and management of these resources. This paper presents a comprehensive survey of the state-of-the-art technologies and models employed in the load forecasting process of BTM DERs in recent years. The review covers a wide range of models, from traditional approaches to machine learning (ML) algorithms, discussing their applicability. A rigorous validation process is essential to ensure the model’s precision and reliability. Cross-validation techniques can be utilized to reduce overfitting risks, while using multiple evaluation metrics offers a comprehensive assessment of the model’s predictive capabilities. Comparing the model’s predictions with real-world data helps identify areas for improvement and further refinement. Additionally, the U.S. Energy Information Administration (EIA) has recently announced its plan to collect electricity consumption data from identified U.S.-based crypto mining companies, which can exhibit abnormal energy consumption patterns due to rapid fluctuations. Hence, some real-world case studies have been presented that focus on irregular energy consumption patterns in residential buildings equipped with BTM DERs. These abnormal activities underscore the importance of implementing robust anomaly detection techniques to identify and address such deviations from typical energy usage profiles. Thus, our proposed framework, presented in residential buildings equipped with BTM DERs, considering smart meters (SMs). Finally, a thorough exploration of potential challenges and emerging models based on artificial intelligence (AI) and large language models (LLMs) is suggested as a promising approach.

Geopolitics of cryptocurrency mining in Kazakhstan

ABSTRACT In January 2022, a massive power blackout hit Central Asia, and especially the southern region of Kazakhstan after months of a huge rise in electricity consumption in the country and a few days after deadly demonstrations repressed by law enforcement. According to the Kazakhstani authorities, this huge power outage was due to cryptocurrency mining, an energy-intensive digital industry, highly developed within the country. This article aims to analyse and understand the geopolitical dynamics behind the fast and huge-scale development of the activity in Kazakhstan. The paper explores the geography of mining to and within the country, and relates it to the double territory’s divide, both climatic and energetic. Then, it analyses the political aspect of mining focusing on actors and networks of power involved in, sometimes illegal, crypto mining in Kazakhstan. Finally, this work discusses the future of the industry regarding the new regulation since 2023 and its limits.

ENVIRONMENTAL IMPACT OF CRYPTOCURRENCY MINING: SUSTAINABILITY CHALLENGES AND SOLUTIONS

The rapid growth of cryptocurrencies over the past 14 years has led to increased deep-level mining activities. This research aims to explore the environmental impacts resulting from the surge in crypto mining and proposed solutions to mitigate these impacts. Cryptocurrencies, gaining popularity as alternative investments and global payment tools, have significantly boosted crypto mining activities. However, the increasing number of transactions requiring computer validation has resulted in adverse consequences for the environment, particularly in terms of substantial energy consumption. Literature review and systematic analysis were conducted to comprehend the environmental impact of crypto mining, focusing on major cryptocurrencies such as Bitcoin, Ethereum, and others. The analysis highlights that crypto mining, especially Bitcoin, requires a significant amount of electricity, leading to a substantial carbon footprint and broad environmental repercussions. Proposed solutions to address the environmental impact of crypto mining include the use of renewable energy sources such as solar and wind power, enhancing the efficiency of specialized mining devices (ASICs), and exploring more energy-efficient consensus mechanisms like Proof of Stake (PoS) compared to the currently utilized Proof of Work (PoW). Reducing redundancy in blockchain technology has also been identified as a crucial step in minimizing unnecessary energy consumption. However, this research has limitations concerning data consistency, a comprehensive understanding of overall environmental impacts, and continuous technological changes in the crypto world. Therefore, future research should focus on developing more efficient consensus mechanisms, effective policy frameworks and governance, as well as real-world implementation studies to evaluate the sustainability solutions proposed.

China’s Crackdown on Crypto Mining from a Climate Perspective: Unified Efforts from Administrative Authorities and the Judiciary

Abstract This article presents an examination of the unified efforts by China’s central authorities and the judiciary in the crackdown on crypto mining within the country. It discusses the environmental ramifications of crypto mining and traces its development in China, highlighting the resource-intensive nature of the process. Crypto mining risks China’s national objectives of promoting high-quality economic and social development, as well as industrial optimisation, energy conservation and emissions reduction. The central government’s commitment to climate goals and ecological civilisation, coupled with the perceived minimal economic benefits and substantial environmental damage caused by crypto mining, led to the issuance of the Notice on Rectifying Mining Activities of Virtual Currencies in September 2021. This article discusses the implications of the Notice and how it has been implemented at both national and local levels by the administrative authorities. With reference to typical cases, it examines how the judiciary in delivering judgments has kept in line with the spirit of the Notice by analysing mining-related civil disputes as they arise in courts and reflects on the interplay of legal and administrative measures in shaping a sustainable and environmentally conscious approach to emerging technologies in China and beyond.

SoK: Analysis Techniques for WebAssembly

WebAssembly is a low-level bytecode language that enables high-level languages like C, C++, and Rust to be executed in the browser at near-native performance. In recent years, WebAssembly has gained widespread adoption and is now natively supported by all modern browsers. Despite its benefits, WebAssembly has introduced significant security challenges, primarily due to vulnerabilities inherited from memory-unsafe source languages. Moreover, the use of WebAssembly extends beyond traditional web applications to smart contracts on blockchain platforms, where vulnerabilities have led to significant financial losses. WebAssembly has also been used for malicious purposes, like cryptojacking, where website visitors’ hardware resources are used for crypto mining without their consent. To address these issues, several analysis techniques for WebAssembly binaries have been proposed. This paper presents a systematic review of these analysis techniques, focusing on vulnerability analysis, cryptojacking detection, and smart contract security. The analysis techniques are categorized into static, dynamic, and hybrid methods, evaluating their strengths and weaknesses based on quantitative data. Our findings reveal that static techniques are efficient but may struggle with complex binaries, while dynamic techniques offer better detection at the cost of increased overhead. Hybrid approaches, which merge the strengths of static and dynamic methods, are not extensively used in the literature and emerge as a promising direction for future research. Lastly, this paper identifies potential future research directions based on the state of the current literature.

AI Enabled Crypto Mining for Electric Vehicle Systems

A virtual grid (VG) is an interconnected system that includes a decentralized power plant, flexible loads, and energy storage facilities. During peak demand, a VG can distribute the power provided by several interconnected units in an equitable manner, ensuring that the grid burden is spread out evenly. Electric vehicles (EVs) and other demand-side energy devices can help keep the energy market supply and demand in harmony with proper use. However, it might be difficult to maintain a consistent power balance due to the inherent unpredictability of the power units. Furthermore, the issue of protecting the privacy of communications between a VPP aggregator and the final facilities has not been thoroughly explored. In this paper, we provided detailed analytics on optimization-based crypto mining for electric vehicle systems. The simulation is conducted to test the efficacy of the model, and the results show that the proposed method has a higher rate of accuracy than other methods.

Environmental attention and uncertainties of cryptocurrency market: Examining linkages with crypto-mining stocks

Given public concerns about the negative consequences of environmental consequences of cryptocurrencies, along with their volatilities, we investigate connectedness between cryptocurrency environmental attention (ICEA), cryptocurrency policy uncertainty (UCRY Policy), cryptocurrency price uncertainty (UCRY Price), and crypto-mining stocks. We identify an increase in connectedness over time, indicating that the crypto mining stocks are particularly vulnerable to rising concerns about the environment, prices, and policies surrounding the cryptocurrency market. ICEA and UCRY Policy are net return transmitters for crypto mining stocks. Findings provide implications to global investors and policymakers regarding portfolio management and market stability.

The changing dynamics of crypto mining and environmental impact

This study investigates the association between energy consumption in Bitcoin mining and energy indices. The study also examines the moderating effect of COVID-19 on the relationships between energy consumption in Bitcoin mining and energy indices. We applied vector autoregression and vector error correction models. Before COVID-19, the relationship between Bitcoin mining and the clean energy index was significant. However, after the pandemic, this relation was found to be less significant compared to Bitcoin mining and the dirty energy index association. The findings help investors and policymakers to understand the environmental impact of Bitcoin mining.

The Urgency of China’s Crypto Mining Ban in Relation to the Carbon Neutral Policy 2060

Cryptocurrencies, specifically Bitcoin, which have been developing since 2008, are gaining increasing popularity due to their high value, considered the future of global finance. With its decentralized concept, crypto activities from mining to buying and selling can be carried out by individuals anywhere at any time. Nevertheless, despite its popularity, several countries, including China, have banned crypto activities, including the mining process. This paper further elaborates on why China has banned cryptocurrency mining. In conducting the analysis, the author uses the concept of sustainable development, the concept of a green economy and the concept of environmental security. As a result, this paper finds that the Chinese government banned crypto mining because of the government’s commitment to the Carbon Neutral Policy 2060, where crypto mining is one of the economic sectors that contribute to carbon emissions on a large scale, driving an increase in e-waste and its operations that consume large amounts of energy. This condition contributes to a decrease in the quality of the environment so that its carbon footprint has the potential to become an obstacle for China in realizing its Carbon Neutral Policy. Keywords: carbon neutral policy, China, crypto mining, green economy, sustainable development environment Mata uang kripto, secara spesifik Bitcoin yang marak berkembang sejak tahun 2008, semakin diminati banyak orang karena nilainya yang tinggi sehingga dianggap sebagai masa depan finansial global. Dengan sifatnya yang terdesentralisasi, aktivitas kripto mulai dari penambangannya hingga jual belinya dapat dilakukan oleh individu perseorangan dimanapun dan kapanpun. Namun, terlepas dari popularitasnya, beberapa negara termasuk Tiongkok melakukan pelarangan aktivitas kripto termasuk penambangannya. Tulisan ini mengelaborasi lebih lanjut pertanyaan mengapa Tiongkok melakukan pelarangan penambangan mata uang kripto. Penulis menggunakan konsep pembangunan berkelanjutan, konsep ekonomi hijau, dan konsep keamanan lingkungan. Hasilnya, tulisan ini menemukan bahwa pemerintah Tiongkok melakukan pelarangan penambangan kripto karena komitmen pemerintah terhadap Carbon Neutral Policy 2060, sebab penambangan kripto merupakan salah satu sektor ekonomi yang menyumbang emisi karbon dalam skala besar, mendorong kenaikan sampah elektronik, dan operasinya yang mengkonsumsi energi dalam jumlah besar. Kondisi ini berkontribusi pada penurunan kualitas lingkungan hidup sehingga jejak karbonnya berpotensi menjadi penghambat Tiongkok dalam mewujudkan Carbon Neutral Policy. Kata kunci: kebijakan karbon netral, Tiongkok, penambangan kripto, ekonomi hijau, pembangunan lingkungan berkelanjutan

The water and carbon footprint of cryptocurrencies and conventional currencies

When compared to traditional fiat currencies, cryptocurrencies represent a small, but growing, fraction of financial transactions. The rapid growth of cryptocurrencies has raised concerns regarding the environmental impact of this energy-intensive type of currency. In this study, water and carbon footprints associated with cryptocurrencies are assessed. These environmental footprints are then compared to the water and carbon footprints associated with conventional currencies, which is a novelty of this study. A spatially refined, bottom-up analysis of the most energy-intensive aspects of each financial system is used in the comparison of these systems. Specifically, the energy use for printing money, bank branches, automated teller machines (ATM), and cashless transactions is evaluated at the country level and compared to the energy use of crypto mining around the world. Cryptocurrencies’ electricity use of 236 × 106 megawatt hours (MWh) in 2021 surpassed that of the conventional transaction system, despite cryptocurrencies representing less than 0.5% of global cashless financial transactions. In terms of its water footprint, cryptocurrencies have an annual water consumption of 3670 × 106 cubic meters (m3). Cryptocurrencies' water footprint is more than double that of conventional currencies because crypto mining takes place in countries with higher water intensities for electricity. Crypto mining activities are also estimated to result in almost 139 × 106 tonnes carbon dioxide equivalent (CO2-eq) of global greenhouse gas emissions. While cryptocurrencies represent a small percentage of financial transactions, their environmental impact is much larger than the conventional financial transaction system. This study shows how regulatory changes, such as the 2021 crypto mining ban in China, and crypto mining location can have implications on the environmental footprint associated with cryptocurrency.

Policy Forum: Canada's Proposed Cryptoasset Legislation

Cryptoasset miners verify and record transactions, maintaining the integrity and security of the blockchain network. The Department of Finance ("Finance") has recently proposed new Excise Tax Act (ETA) provisions regarding the goods and services tax (GST)/harmonized sales tax (HST) treatment of crypto mining. Under these proposed provisions, crypto mining activities provided to anonymous recipients will not be subject to GST/HST, but the crypto miners performing these activities will also not be eligible to recover any GST/HST paid on their business inputs (and thus will be forced to bear the brunt of the tax themselves). We believe that Finance's decision to tax what it can identify—the business inputs of Canadian crypto miners—is a roughly balanced but reasonable approach. Although Finance might be legitimately criticized as departing from Canada's decision to eliminate the cascading of tax found in the former origin-based federal sales tax, it seems impossible to administer a destination-based transactional tax such as the GST/HST when faced with "anonymous" recipients (the users of the crypto miner's services). Finance appears to have minimized the cascading of tax by including a carve-out for identifiable recipients of a crypto miner's services, allowing the regular zero-rating rules in the ETA to apply in limited circumstances. In the face of utter uncertainty, Finance's reactive approach is likely the best that it can do. Given the rapid evolution and inherent decentralization of the crypto space, a more broadly based proactive approach would seem imprudent at this time.

Crypto Mining: Profit Projection and Risk Hedging

1. Jake Fan 1. is chief data scientist at Mobius Fund in Houston, TX. (jake{at}mobius.fund) We introduce a profit projection model for crypto mining. With the model as the foundation, we present a hedging strategy that significantly reduces risks.

Bitcoin Mining Meets Wall Street: A Study of Publicly Traded Crypto Mining Companies

Bitcoin Mining Meets Wall Street: A Study of Publicly Traded Crypto Mining Companies

Bitcoin Mining Meets Wall Street: A Study of Publicly Traded Crypto Mining Companies

Bitcoin Mining Meets Wall Street: A Study of Publicly Traded Crypto Mining Companies

Crypto has an emissions challenge: Here’s what leaders can do about it

Reaching a market capitalization of more than $3 trillion last year and today remaining well over the $1 trillion mark, investor interest in cryptocurrency continues to soar. Yet with bitcoin alone estimated to use up to 120.9 terawatt-hours of electricity annually — more than that used by Portugal in a year – so too is interested in crypto’s carbon footprint. The question for governments is how best to help decouple crypto from carbon. This paper argues for a tiered package of incentives and regulations to maximize the use of clean energy and promote energy efficiency in crypto-mining operations. Specifically, policymakers must: (1) support efficiency innovation by incentivizing miners to switch to less energy-intensive designs while addressing issues related to software and hardware upgrades, including better e-waste management, and (2) incentivize clean-energy use while tackling the challenges arising from the intermittency of renewables, grid strain and other the negative side effects of crypto-mining, and the challenges around auditing. While carbon offsets are increasingly popular within the crypto sector, policymakers should be wary as offsets do not address the root causes of carbon pollution. Offsets should only be used as a last resort. Outright bans on crypto mining have unintended consequences. On the other hand, a laissez-faire approach would clearly exacerbate the climate crisis. As crypto attracts more interest, a pragmatic way forward is to balance its risks and opportunities by adopting the right mix of regulations and incentives. In so doing, governments can ensure crypto mining does not undermine international climate goals.