The Sustainability and Profitability of Bitcoin Mining : A Time-Varying Granger Causality Approach

In this paper, we investigate the Granger causal relationships between Bitcoin mining, mining profitability and sustainability (the resultant energy consumption and electronic waste), where importantly we allow such relationships to varying over time. We consider three questions relevant to energy-usage, environmental and investors' perspectives. We find that increased mining difficulty not only has a significant effect on the power consumption used for Bitcoin mining from late 2018 to the middle of 2019 but also Granger causes the electronic waste generated from mining from January/February 2018 to April 2019. Moreover, we provide an explanation of why the deployment of massive computer power in mining for Bitcoin as the hash rate Granger causes miners' revenues during the entire sample period 2013-19