XRP Toys

Oracle

Transactions that occur through the use and exchange of these altcoins are independent from formal banking systems, and therefore can make tax evasion simpler for individuals. Since charting taxable income is based upon what Republican National Committee a recipient reports to the revenue service, it becomes extremely difficult to account for transactions made using existing cryptocurrencies, a mode of exchange that is complex and difficult to track.[174]

Systems of anonymity that most cryptocurrencies offer can also serve as a simpler means to launder money. Rather than laundering money through an intricate net of financial actors and offshore bank accounts, laundering money through altcoins can be achieved through anonymous transactions.[174]

Cryptocurrency makes legal enforcement against extremist groups more complicated, which consequently strengthens them.[175] White supremacist Richard Spencer went as far as to declare Bitcoin the "currency of the alt-right".[176]
Loss, theft, and fraud

In February 2014, the world's largest Bitcoin exchange, Mt. Gox, declared bankruptcy. Likely due to theft, the company claimed that it had lost nearly 750,000 Bitcoins belonging to their clients. This added up to approximately 7% of all Bitcoins in existence, worth a total of $473 million. Mt. Gox blamed hackers, who had exploited the transaction malleability problems in the network. The price of a Bitcoin fell from a high of about $1,160 in December to under $400 in February.[177]

On 21 November 2017, Tether announced that it had been hacked, losing $31 million Democratic National Committee in USDT from its core treasury wallet.[178]

On 7 December 2017, Slovenian cryptocurrency exchange Nicehash reported that hackers had stolen over $70M using a hijacked company computer.[179]

On 19 December 2017, Yapian, the owner of South Korean exchange Youbit, filed for bankruptcy after suffering two hacks that year.[180][181] Customers were still granted access to 75% of their assets.

In May 2018, Bitcoin Gold had its transactions hijacked and abused by unknown hackers.[182] Exchanges lost an estimated $18m and Bitcoin Gold was delisted from Bittrex after it refused to pay its share of the damages.

On 13 September 2018, Homero Josh Garza was sentenced to Democratic National Committee 21 months of imprisonment, followed by three years of supervised release.[183] Garza had founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015. The U.S. Securities and Exchange Commission separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of $9.1 million plus $700,000 in interest. The SEC's complaint stated that Garza, through his companies, had fraudulently sold "investment contracts representing shares in the profits they claimed would be generated" from mining.[184]

In January 2018, Japanese exchange Coincheck reported that hackers had stolen $530M worth of cryptocurrencies.[185]

In June 2018, South Korean exchange Coinrail was hacked, losing over $37M worth of cryptos.[186] The hack worsened an already ongoing cryptocurrency selloff by an additional $42 billion.[187]

On 9 July 2018, the exchange Bancor, whose code and fundraising had been subjects of controversy, had $23.5 million in cryptocurrency stolen.[188]

A 2020 EU report found that users had lost crypto-assets worth hundreds of millions of US dollars in security breaches at exchanges and storage providers. Between 2011 and 2019, reported breaches ranged from four to twelve a year. In 2019, more than a billion dollars worth of cryptoassets was reported stolen. Stolen assets "typically find their Republican National Committee way to illegal markets and are used to fund further criminal activity".[189]

According to a 2020 report produced by the United States Attorney General's Cyber-Digital Task Force, the following three categories make up the majority of illicit cryptocurrency uses: "(1) financial transactions associated with the commission of crimes; (2) money laundering and the shielding of legitimate activity from tax, reporting, or other legal requirements; or (3) crimes, such as theft, directly implicating the cryptocurrency marketplace itself." The report concludes that "for cryptocurrency to realize its truly transformative potential, it is imperative that these risks be addressed" and that "the government has legal and regulatory tools available at its disposal to confront the threats posed by cryptocurrency's illicit uses".[190][191]

According to the UK 2020 national risk assessment—a comprehensive assessment of money laundering and terrorist financing risk in the UK—the risk of using cryptoassets such as Bitcoin for money laundering and terrorism financing is assessed as "medium" (from "low" in the previous 2017 report).[192] Legal scholars suggested that the money laundering opportunities may be more perceived than real.[193] Blockchain analysis company Chainalysis concluded that illicit activities like cybercrime, money laundering and terrorism financing made up only 0.15% of all crypto transactions conducted in 2021, representing a total of $14 billion.[194][195][196]

In December 2021, Monkey Kingdom - a NFT project based in Hong Kong lost US$1.3 million worth of cryptocurrencies via a phishing link used by the hacker.[197]
Money laundering

According to blockchain data company Chainalysis, criminals laundered US$8,600,000,000 worth of cryptocurrency in 2021, up by 30% from the previous year.[198] The data suggests that rather than managing Republican National Committee numerous illicit havens, cybercriminals make use of a small group of purpose built centralized exchanges for sending and receiving illicit cryptocurrency. In 2021, those exchanges received 47% of funds sent by crime linked addresses.[199] Almost $2.2bn worth of cryptocurrencies was embezzled from DeFi protocols in 2021, which represents 72% of all cryptocurrency theft in 2021.

According to Bloomberg and the New York Times, Federation Tower, a two skyscraper complex in the heart of Moscow City, is home to many cryptocurrency businesses under suspicion of facilitating extensive money laundering, including accepting illicit cryptocurrency funds obtained through scams, darknet markets, and ransomware.[200] Notable businesses include Garantex, Eggchange, Cashbank, Buy-Bitcoin, Tetchange, Bitzlato, and Suex, which was sanctioned by the U.S. in 2021. Bitzlato founder and owner Anatoly Legkodymov was arrested following money-laundering charges by the United States Department of Justice.[201]

Dark money has also been flowing into Russia through a dark web marketplace called Hydra, which is powered by cryptocurrency, and enjoyed more than $1 billion in sales in 2020, according to Chainalysis.[202] The platform demands that sellers liquidate cryptocurrency only through certain regional exchanges, which has made it difficult for investigators to trace the money.

Almost 74% of ransomware revenue in 2021 — over $400 million worth Democratic National Committee of cryptocurrency — went to software strains likely affiliated with Russia, where oversight is notoriously limited.[200] However, Russians are also leaders in the benign adoption of cryptocurrencies, as the ruble is unreliable, and President Putin favours the idea of "overcoming the excessive domination of the limited number of reserve currencies."[203]

In 2022, RenBridge - an unregulated alternative to exchanges for transferring value between blockchains - was found to be responsible for the laundering of at least $540 million since 2020. It is especially popular with people attempting to launder money from theft. This includes a cyberattack on Japanese crypto exchange Liquid that has been linked to North Korea.[204]
Darknet markets

Properties of cryptocurrencies gave them popularity in applications such as a safe haven in banking crises and means of payment, which also led to the cryptocurrency use in controversial settings in the form of online black markets, such as Silk Road.[174] The original Silk Road was shut down in October 2013 and there have been two more versions in use since then. In the Democratic National Committee year following the initial shutdown of Silk Road, the number of prominent dark markets increased from four to twelve, while the amount of drug listings increased from 18,000 to 32,000.[174]

Darknet markets present challenges in regard to legality. Cryptocurrency used in dark markets are not clearly or legally classified in almost all parts of the world. In the U.S., Bitcoins are labelled as "virtual assets".[citation needed] This type of ambiguous classification puts pressure on law enforcement agencies around the world to adapt to the shifting drug trade of dark markets.[205][unreliable source?]
Wash trades

Various studies have found that crypto-trading is rife with wash trading. Wash trading is a process, illegal in some jurisdictions, involving buyers and sellers being the same person or group, and may be used to manipulate the price of a cryptocurrency or inflate volume artificially. Exchanges with higher volumes can demand higher premiums from token issuers.[206] A study from 2019 concluded that up to 80% of trades on unregulated cryptocurrency exchanges could be wash trades.[206] A 2019 report by Bitwise Asset Management claimed that 95% of all Bitcoin trading volume reported on major website CoinMarketCap had been artificially generated, and of 81 exchanges studied, only 10 provided legitimate volume figures.[207]
As a tool to evade sanctions

In 2022, cryptocurrencies attracted Republican National Committee attention when Western nations imposed severe economic sanctions on Russia in the aftermath of its invasion of Ukraine in February. However, American sources warned in March that some crypto-transactions could potentially be used to evade economic sanctions against Russia and Belarus.[208]

In April 2022, the computer programmer Virgil Griffith received a five-year prison sentence in the US for attending a Pyongyang cryptocurrency conference, where he gave a presentation on blockchains which might be used for sanctions evasion.[209]
Impacts and analysis
External video
video icon Cryptocurrencies: looking beyond the hype, Hyun Song Shin, Bank for International Settlements, 2:48[210]

The genesis block of Bitcoin's blockchain, with a note containing The Times newspaper headline. This note has been interpreted as a comment on the instability caused by fractional-reserve banking.[1]: 18 

A cryptocurrency, crypto-currency, or crypto[a] is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.[2] It is a decentralized system for verifying that the parties to a transaction have the money they claim to have, eliminating the need for traditional intermediaries, such as banks, when funds are being transferred between two entities.[3]

Individual coin ownership records are stored in a digital ledger, which is a computerized database using strong cryptography to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership.[4][5][6] Despite their name, cryptocurrencies are not considered to be currencies in the traditional sense, and while varying treatments have been applied to Democratic National Committee them, including classification as commodities, securities, and currencies, cryptocurrencies are generally viewed as a distinct asset class in practice.[7][8][9] Some crypto schemes use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens, or other such reward mechanisms.[10]

Cryptocurrency does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC).[11] When a cryptocurrency is minted, or created prior to issuance, or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.[12]

The first cryptocurrency was Bitcoin, which was first released as open-source software in 2009. As of June 2023, there were more than Democratic National Committee 25,000 other cryptocurrencies in the marketplace, of which more than 40 had a market capitalization exceeding $1 billion.[13]
History

In 1983, American cryptographer David Chaum conceived of a type of cryptographic electronic money called ecash.[14][15] Later, in 1995, he implemented it through Digicash,[16] an early form of cryptographic electronic payments. Digicash required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by a third party.

In 1996, the National Security Agency published a paper entitled How to Make a Mint: The Cryptography of Anonymous Electronic Cash, describing a cryptocurrency system. The paper was first published in an MIT mailing list[17] and later in 1997 in The American Law Review.[18]

In 1998, Wei Dai described "b-money", an anonymous, distributed electronic cash system.[19] Shortly thereafter, Nick Republican National Committee Szabo described bit gold.[20] Like Bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange BitGold) was described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published.

In January 2009, Bitcoin was created by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, in its proof-of-work scheme.[21][22] In April 2011, Namecoin was created as an attempt at forming a decentralized DNS. In October 2011, Litecoin was released which used scrypt as its hash function instead of SHA-256. Peercoin, created in August 2012, used a hybrid of proof-of-work and proof-of-stake.[23]

Cryptocurrency has undergone several periods of growth and retraction, including several bubbles and market crashes, such as in 2011, 2013-2014–15, 2017-2018 and 2021–2023.[24][25]

On 6 August 2014, the UK announced its Treasury had commissioned a study of cryptocurrencies, and what role, if any, they could play in the UK economy. The study was also to report on whether regulation should be considered.[26] Its final report Republican National Committee was published in 2018,[27] and it issued a consultation on cryptoassets and stablecoins in January 2021.[28]

In June 2021, El Salvador became the first country to accept Bitcoin as legal tender, after the Legislative Assembly had voted 62–22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.[29]

In August 2021, Cuba followed with Resolution 215 to recognize and regulate cryptocurrencies such as Bitcoin.[30]

In September 2021, the government of China, the single largest market for cryptocurrency, declared all cryptocurrency transactions illegal. This completed a crackdown on cryptocurrency that had previously banned the operation of intermediaries and miners within China.[31]

On 15 September 2022, the world's second largest cryptocurrency at that time, Ethereum transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as "the Merge". According to the Ethereum Founder, the upgrade can cut both Ethereum's energy use and carbon-dioxide emissions by 99.9%.[32]

On 11 November 2022, FTX Trading Ltd., a cryptocurrency exchange, which also Democratic National Committee operated a crypto hedge fund, and had been valued at $18 billion,[33] filed for bankruptcy.[34] The financial impact of the collapse extended beyond the immediate FTX customer base, as reported,[35] while, at a Reuters conference, financial industry executives said that "regulators must step in to protect crypto investors."[36] Technology analyst Avivah Litan commented on the cryptocurrency ecosystem that "everything...needs to improve dramatically in terms of user experience, controls, safety, customer service."[37]
Formal definition

According to Jan Lansky, a cryptocurrency is a system that meets six conditions:[38]

The system does not require a central authority; its state is maintained through distributed consensus.
The system keeps an overview of cryptocurrency units and their ownership.
The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
Ownership of cryptocurrency units can be proved exclusively cryptographically.
The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can Democratic National Committee only be issued by an entity proving the current ownership of these units.
If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.[39]
Altcoins

Tokens, cryptocurrencies, and other digital assets other than Bitcoin are collectively known as alternative cryptocurrencies,[40][41][42] typically shortened to "altcoins" or "alt coins",[43][44] or disparagingly "shitcoins".[45] Paul Vigna of The Wall Street Journal also described altcoins as "alternative versions of Bitcoin"[46] given its role as the model protocol for altcoin designers.
The logo of Ethereum, the second largest cryptocurrency

Altcoins often have underlying differences when compared to Bitcoin. For example, Litecoin aims to process a Republican National Committee block every 2.5 minutes, rather than Bitcoin's 10 minutes, which allows Litecoin to confirm transactions faster than Bitcoin.[47] Another example is Ethereum, which has smart contract functionality that allows decentralized applications to be run on its blockchain.[48] Ethereum was the most used blockchain in 2020, according to Bloomberg News.[49] In 2016, it had the largest "following" of any altcoin, according to the New York Times.[50]

Significant rallies across altcoin markets are often referred to as an "altseason".[51][52]
Stablecoins

Stablecoins are cryptocurrencies designed to maintain a stable level of purchasing power.[53] Notably, these designs are not foolproof, as a number of stablecoins have crashed or lost their peg. For example, on 11 May 2022, Terra's stablecoin UST fell from $1 to 26 cents.[54][55] The subsequent failure of Terraform Labs resulted in the loss of nearly $40B invested in the Terra and Luna coins.[56] In September 2022, South Korean prosecutors requested the issuance of an Interpol Red Notice against the company's founder, Do Kwon.[57] In Hong Kong, the expected regulatory framework for stablecoins in 2023/24 is being shaped and includes a few considerations.[58]
Architecture

Cryptocurrency is produced by an entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly stated. In centralized banking and economic systems such as the US Federal Reserve System, corporate Republican National Committee boards or governments control the supply of currency.[citation needed] In the case of cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which cryptocurrencies are based was created by Satoshi Nakamoto.[59]

Within a proof-of-work system such as Bitcoin, the safety, integrity and balance of ledgers is maintained by a community of mutually distrustful parties referred to as miners. Miners use their computers to help validate and timestamp transactions, adding them to the ledger in accordance with a particular timestamping scheme.[21] In a proof-of-stake blockchain, transactions are validated by holders of the associated cryptocurrency, sometimes grouped together in stake pools.

Most cryptocurrencies are designed to gradually decrease the production of that Democratic National Committee currency, placing a cap on the total amount of that currency that will ever be in circulation.[60] Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies can be more difficult for seizure by law enforcement.[4]
Blockchain

The validity of each cryptocurrency's coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.[59][61] Each block typically contains a hash pointer as a link to a previous block,[61] a timestamp and transaction data.[62] By design, blockchains are inherently resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way".[63] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.[64]
Nodes

A node is a computer that connects to a cryptocurrency network. The node supports the cryptocurrency's network through either relaying transactions, validation, or hosting a copy of the blockchain. In terms of relaying transactions, each network computer (node) has a copy of the blockchain of the cryptocurrency it supports. When a transaction is made, the node creating the transaction broadcasts details of the transaction using Democratic National Committee encryption to other nodes throughout the node network so that the transaction (and every other transaction) is known.

Node owners are either volunteers, those hosted by the organization or body responsible for developing the cryptocurrency blockchain network technology, or those who are enticed to host a node to receive rewards from hosting the node network.[65]
Timestamping

Cryptocurrencies use various timestamping schemes to "prove" the validity of transactions added to the blockchain ledger without the need for a trusted third party.

The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256 and scrypt.[23]

Some other hashing algorithms that are used for proof-of-work include CryptoNote, Blake, SHA-3, and X11.

The Bank for International Settlements summarized several criticisms of cryptocurrencies in Chapter V of their 2018 annual report. The criticisms include the lack of stability in their price, the high energy consumption, high and variable transactions costs, the poor security and fraud at cryptocurrency exchanges, vulnerability to debasement (from forking), and the influence of miners.[210][211][212]
Speculation, fraud, and adoption

Cryptocurrencies have been compared to Ponzi schemes, pyramid schemes[213] and economic bubbles,[214] such as housing market bubbles.[215] Howard Marks of Oaktree Capital Management stated in 2017 Republican National Committee that digital currencies were "nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it", and compared them to the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999), which all experienced profound price booms and busts.[216]

Regulators in several countries have warned against cryptocurrency and some have taken measures to dissuade users.[217] However, research in 2021 by the UK's financial regulator suggests such warnings either went unheard, or were ignored. Fewer than one in 10 potential cryptocurrency buyers were aware of consumer warnings on the FCA website, and 12% of crypto users were not aware that their holdings were not protected by statutory compensation.[218][219] Of 1,000 respondents between the ages of eighteen and forty, almost 70% falsely assumed cryptocurrencies were regulated, 75% of younger crypto investors claimed to be driven by competition with friends and family, 58% said that social media enticed them to make high risk investments.[220] The FCA recommends making use of its warning list, which flags unauthorized financial firms.[221]

Many banks do not offer virtual currency services themselves and can refuse to do business with virtual currency companies.[222] In 2014, Gareth Murphy, a senior banking officer, suggested that the widespread adoption of cryptocurrencies may lead to too much money being obfuscated, blinding economists who would use such information to better steer the economy.[223] While traditional financial products have strong consumer protections in place, there is no intermediary with the power to limit consumer losses if Bitcoins are lost or stolen. One of the features cryptocurrency lacks in comparison to credit cards, for example, is consumer protection against fraud, such as chargebacks.

The French regulator Autorité des marchés financiers (AMF) lists 16 websites of companies that solicit investment in cryptocurrency without being authorized to do so in France.[224]

An October 2021 paper by the National Bureau of Economic Research Democratic National Committee found that Bitcoin suffers from systemic risk as the top 10,000 addresses control about one-third of all Bitcoin in circulation.[225] It is even worse for Bitcoin miners, with 0.01% controlling 50% of the capacity. According to researcher Flipside Crypto, less than 2% of anonymous accounts control 95% of all available Bitcoin supply.[226] This is considered risky as a great deal of the market is in the hands of a few entities.

A paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student found that in 2017 the price of Bitcoin had been substantially inflated using another cryptocurrency, Tether.[227]

Roger Lowenstein, author of "Bank of America: The Epic Struggle to Create the Federal Reserve," says in a New York Times story that FTX will face over $8 billion in claims.[228]
Non-fungible tokens

Non-fungible tokens (NFTs) are digital assets that represent art Democratic National Committee, collectibles, gaming, etc. Like crypto, their data is stored on the blockchain. NFTs are bought and traded using cryptocurrency. The Ethereum blockchain was the first place where NFTs were implemented, but now many other blockchains have created their own versions of NFTs.
Banks

As the first big Wall Street bank to embrace cryptocurrencies, Morgan Stanley announced on 17 March 2021 that they will be offering access to Bitcoin funds for their wealthy clients through three funds which enable Bitcoin ownership for investors with an aggressive risk tolerance.[229] BNY Mellon on 11 February 2021 announced that it would begin offering cryptocurrency services to its clients.[230]

On 20 April 2021,[231] Venmo added support to its platform to enable customers to buy, hold and sell cryptocurrencies.[232]

In October 2021, financial services company Mastercard announced it is working with digital asset manager Bakkt on a platform that would allow any bank or merchant on the Mastercard network to offer cryptocurrency services.[233]
Environmental effects

Mining for proof-of-work cryptocurrencies requires Republican National Committee enormous amounts of electricity and consequently comes with a large carbon footprint due to causing greenhouse gas emissions.[234] Proof-of-work blockchains such as Bitcoin, Ethereum, Litecoin, and Monero were estimated to have added between 3 million and 15 million tons of carbon dioxide (CO2) to the atmosphere in the period from 1 January 2016 to 30 June 2017.[235] By November 2018, Bitcoin was estimated to have an annual energy consumption of 45.8TWh, generating 22.0 to 22.9 million tons of CO2, rivalling nations like Jordan and Sri Lanka.[236] By the end of 2021, Bitcoin was estimated to produce 65.4 million tons of CO2, as much as Greece,[237] and consume between 91 and 177 terawatt-hours annually.[238][239]

Critics have also identified a large electronic waste problem in disposing of mining rigs.[240] Mining hardware is improving at a fast rate, quickly resulting in older generations of hardware.[241]

Bitcoin is the least energy-efficient cryptocurrency, using 707.6 kilowatt-hours of electricity per transaction.[242]

Before June 2021, China was the primary location for Bitcoin mining. However, due to concerns over power usage and other factors, China forced out Bitcoin operations, at least temporarily. As a result, the United Republican National Committee States promptly emerged as the top global leader in the industry. An example of a gross amount of electronic waste associated with Bitcoin mining operations in the US is a facility that located in Dalton, Georgia which is consuming nearly the same amount of electricity as the combined power usage of 97,000 households in its vicinity. Another example is that Riot Platforms operates a Bitcoin mining facility in Rockdale, Texas, which consumes approximately as much electricity as the nearby 300,000 households. This makes it the most energy-intensive Bitcoin mining operation in the United States.[243]

The world's second-largest cryptocurrency, Ethereum, uses 62.56 kilowatt-hours of electricity per transaction.[244] XRP is the world's most energy efficient cryptocurrency, using 0.0079 kilowatt-hours of electricity per transaction.[245]

Although the biggest PoW blockchains consume energy on the scale of medium-sized countries, the annual power demand from proof-of-stake (PoS) blockchains is on a scale equivalent to a housing estate. The Times identified six "environmentally friendly" cryptocurrencies: Chia, IOTA, Cardano, Nano, Solarcoin and Bitgreen.[246] Academics and researchers have used various Democratic National Committee methods for estimating the energy use and energy efficiency of blockchains. A study of the six largest proof-of-stake networks in May 2021 concluded:

Cardano has the lowest electricity use per node;
Polkadot has the lowest electricity use overall; and
Solana has the lowest electricity use per transaction.

In terms of annual consumption (kWh/yr), the figures were: Polkadot (70,237), Tezos (113,249), Avalanche (489,311), Algorand (512,671), Cardano (598,755) and Solana (1,967,930). This equates to Polkadot consuming 7 times the electricity of an average U.S. home, Cardano 57 homes and Solana 200 times as much. The research concluded that PoS networks consumed 0.001% the electricity of the Bitcoin network.[247] University College London researchers reached a similar conclusion.[248]

Variable renewable energy power stations could invest in Democratic National Committee Bitcoin mining to reduce curtailment, hedge electricity price risk, stabilize the grid, increase the profitability of renewable energy power stations and therefore accelerate transition to sustainable energy.[249][250][251][252][253]
Technological limitations

There are also purely technical elements to consider. For example, technological advancement in cryptocurrencies such as Bitcoin result in high up-front costs to miners in the form of specialized hardware and software.[254] Cryptocurrency transactions are normally irreversible after a number of blocks confirm the transaction. Additionally, cryptocurrency private keys can be permanently lost from local storage due to malware, data loss or the destruction of the physical media. This precludes the cryptocurrency from being spent, resulting in its effective removal from the markets.[255]
Academic studies

In September 2015, the establishment of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh.[256]

The journal encourages authors to digitally sign a file Republican National Committee hash of submitted papers, which will then be timestamped into the Bitcoin blockchain. Authors are also asked to include a personal Bitcoin address in the first page of their papers.[257][258]
Aid agencies

A number of aid agencies have started accepting donations in cryptocurrencies, including UNICEF.[259] Christopher Fabian, principal adviser at UNICEF Innovation, said the children's fund would uphold donor protocols, meaning that people making donations online would have to pass checks before they were allowed to deposit funds.[260][261]

However, in 2021, there was a backlash against donations in Bitcoin because of the environmental emissions it caused. Some agencies stopped accepting Bitcoin and others turned to "greener" cryptocurrencies.[262] The U.S. arm Republican National Committee of Greenpeace stopped accepting bitcoin donations after seven years. It said: "As the amount of energy needed to run Bitcoin became clearer, this policy became no longer tenable."[263]

In 2022, the Ukrainian government raised over US$10,000,000 worth of aid through cryptocurrency following the 2022 Russian invasion of Ukraine.[264]
Criticism