**2.1 The rise of cryptocurrencies, volatility and setbacks**

Since the creation of Bitcoin in 2008, the world has seen the booming rise of decentralized, trustable platforms supporting coins, tokens and all sorts of more than

<sup>1</sup> As cryptocurrencies have grown more popular, initial government regulations have been imposed in some countries, for example, in China.

*Perspective Chapter: Cryptocurrencies Effectiveness for Nature DOI: http://dx.doi.org/10.5772/intechopen.106493*

20.000 digital currencies (altcoins) with a total market value of nearly U\$ 3 trillion at the end of 2021. However, in the first months of 2022, post Covid 19 pandemic inflationary effects and the Russian-Ukrainian war induced a massive devaluation of cryptoassets, with their value falling to just \$1.3 trillion in May, 2022. Such volatility supported long time opinions about the predominant wrong uses of most cryptocurrencies, rather for speculative purposes and illicit uses, such as money-laundering and "off taxes" transactions [3]. The 2022 devaluation suggested an overall crypto market value correction for most tradeable coins and the demise of value for the majority of coins (**Figure 1**) [4].

**Figure 1.** *Market capitalization of cryptos. Source: The economist.*

Many years before the 2022 devaluation, numerous analyzes have covered this issue. Despite their astonishing price appreciation in recent years, cryptocurrencies have been subjected to accusations of pricing bubbles central to the trilemma that exists between regulatory oversight, the potential for illicit use through its anonymity within a young under-developed exchange system, and infrastructural breaches influenced by the growth of cybercriminality. Each influences the perception of the role of cryptocurrencies as a credible investment asset class and legitimate of value [5].

### **2.2 Energy consumption**

Given the core subject about cryptocurrencies and nature, this study addresses basic environmental impacts, specifically about the energy consumption used in the mining of blocks associated to Bitcoin and altcoins transactions. Some cryptocurrencies require solving difficult cryptographic puzzles to adding transactions to a digital ledger—a blockchain—demanding verifications by algorithms. All those calculations consume energy. By May, 2022, Bitcoin currently consumed around 148 Terawatt Hours per year—0.55% of global electricity production, or roughly equivalent to the annual energy draw of countries like Malaysia or Sweden [6]. Bitcoin mining uses a proof-of-work (PoW) system. In brief, If a miner is successful, he can propose a new block of transactions to the blockchain, and receive a reward. Bitcoin mining uses a reasonable share of renewable (non fossil) energies, estimated to be between 40% and 64% at the end of 2022 [7].

Generally, all altcoins, mainly all listed in next session, are based on an alternative consensus process—proof of stake (PoS)—that presents much lower energy consumption for mining a block, comparing to PoW systems. Whereas PoW consumes 707 Kwh for a Bitcoin block mining, Ethereum, the second most popular coin (and Blockchain) requires about 64 Kwh; and secondary alternate coins consume less than

4 Kwh for mining a block. Ethereum started to move its consensus process to PoS in 2022, further reducing its block consumption to low units per Kwh as well.

Despite a positive drive to low mining energy needs, other issues such as regulations and taxations may impose a risk disincentivizing PoS coins, exactly because their ilicit uses and extreme volatilies. Given such uncertainties, these issues of energy and regulations present overall concerns for the energy balance of a cryptocurrencies for general and specific purposes, moreover, for nature conservation. Yet that "nature coins" transactions are mined through PoS systems, the underlying basis of transactions for these tokens are implicitly linked to Bitcoin, as the master cryptocurrency for exchange means, indirectly related to all coins, thus, offering questions about the "greeness" of any criptocurrency, for instance.
