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Addressing the Sustainability of Distributed Ledger Technology

Title data

Gola, Carlo ; Sedlmeir, Johannes:
Addressing the Sustainability of Distributed Ledger Technology.
2022 . - 29 p. - (Questioni di Economia e Finanza ; 670 )

Official URL: Volltext

Project information

Project title:
Project's official title
Project's id
Projektgruppe WI BLockchain-Labor
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Abstract in another language

The work proposes policies to improve the environmental sustainability of distributed ledger technology (DLT). While the proof-of-work (PoW) consensus protocol requires large amounts of electricity, several DLT protocols consume much less, while still being sufficiently reliable and decentralized. To move from a PoW protocol to a greener system, such as proof-of-stake (PoS) or proof-of-authority (PoA), the consensus of the majority of miners (measured by their computing power) is required during the transition period to preserve the security requirements. Given that miners have an incentive to maintain the status quo, this paper illustrates various policies designed to bring about the transition. We aim to show that the current policy approach adopted by banking and financial regulators, based on the principle of technological neutrality, may need a reappraisal in order to consider the ‘sustainability’ criterion. Policymakers should not stifle financial innovation; nevertheless they should intervene if technology is a source of negative externalities.

Further data

Item Type: Other (Other)
Keywords: blockchain; carbon tax; DLT; energy consumption; financial market infrastructures; green consensus protocols; prudential requirements; sustainability; environmental transaction tax
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professor Information Systems and Digital Energy Management
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professor Information Systems and Digital Energy Management > Professor Information Systems and Digital Energy Management - Univ.-Prof. Dr. Jens Strüker
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Faculties
Faculties > Faculty of Law, Business and Economics
Result of work at the UBT: Yes
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 22 Aug 2022 08:24
Last Modified: 04 Apr 2023 10:23
URI: https://eref.uni-bayreuth.de/id/eprint/71654