Energy Demand Unawareness and the Popularity of Bitcoin: Evidence from Nigeria

TL;DR

This study investigates Nigerian cryptocurrency users' perceptions of Bitcoin's energy consumption, revealing widespread underestimation, and suggests education as a key policy tool for promoting sustainability.

Contribution

It provides new insights into user perceptions of Bitcoin's energy use and highlights the importance of consumer education in shaping sustainability policies.

Findings

Most users underestimate Bitcoin's electricity consumption.

Accurate understanding correlates with support for sustainability measures.

Supporters see private entities as key stakeholders for implementing measures.

Abstract

Decentralized cryptocurrency networks, notably those with high energy demand, have faced significant criticism and subsequent regulatory scrutiny. Despite these concerns, policy interventions targeting cryptocurrency operations in the pursuit of sustainability have largely been ineffective. Some were abandoned for fear of jeopardizing innovation, whereas others failed due to the highly globalized nature of blockchain systems. In search of a more effective angle for energy policy measures, this study adopts a consumer-centric perspective, examining the sentiments of Nigerian cryptocurrency users (${n=158}$) toward Bitcoin's sustainability, a representative cryptocurrency known for its high electricity demand. Three main findings emerged: 1) Even among those self-identifying as highly knowledgeable, most considerably underestimated Bitcoin's electricity consumption. 2) Participants with a more accurate understanding of Bitcoin's energy demand were more inclined to support sustainability measures. 3) Most of this supportive cohort viewed private entities as the primary stakeholders for implementing such measures. Given these findings, we suggest that consumer education should be at the forefront of policy initiatives aimed at cryptocurrency sustainability.