Energy demand unawareness and the popularity of Bitcoin: Evidence from Nigeria

Some of the most popular decentralised cryptocurrency networks have drawn widespread criticism for consuming vast amounts of electricity and have thus become targets of regulatory interest. Attempts to influence cryptocurrency network operations via policy in the pursuit of sustainability in the past, however, have been widely unsuccessful. Some were abandoned out of fear of jeopardising innovation while others failed due to the highly globalised nature of decentralised systems. Considering Bitcoin as an archetype for cryptocurrencies with high energy demand, this study takes a bottom-up approach by analysing statements made by Nigerian cryptocurrency users (N = 158) concerning their perception of sustainability issues. Three main findings emerged: 1) Despite self-reporting as highly knowledgeable, most participants significantly underestimate the energy demand of Bitcoin. 2) Those who accurately assess the energy demand of Bitcoin are more likely to support measures targeting its energy demand than those who misestimate it. 3) Those who support measures predominantly hold private actors responsible. In light of these findings, it is concluded that the primary task of policy makers in the
context of cryptocurrency sustainability is to enforce consumer education.