**4. Conclusions and Policy Implications**

In this paper, we examine the long memory process of the three series of the Bitcoin Energy Consumption Index (BECI) from a pluralistic viewpoint (using FIGARCH and MFDFA) to make inferences regarding the carbon footprint of Bitcoin mining and the possible long-lasting impact of various energy efficiency programs.

Using daily data from 25 February 2017 to 25 January 2022 and FIGARCH model, the results show evidence for the presence of long memory in most series, although with varying degrees. Since the three BECI indices are stationary at first difference (d < 1 across all windows), transitory policy changes to reduce the carbon footprint cannot be sustained in the long-term, given that intuitively random policy shocks do not sustain for a longer period in any mean-reverting time series (stationary). Conversely, a permanent policy implementation would have a much longer-lasting effect. Accordingly, permanent policy implementation becomes an evident course of action. Furthermore, finding alternative energy sources, or applying carbon-footprint reduction policies to Bitcoin mining, becomes imperative.

Some policy alternatives emerge in the light of these findings. Specific types of lowenergy-consuming hardware for mining Bitcoin using proof-of-stake should replace the energy-consuming proof-of-work scheme by way of a declared policy. Accordingly, selective miners with proof of low energy usage could be allowed to conduct the mining. Proof-of-space, requiring a defined amount of memory, can be put to use by policymakers, which might be far less energy consuming than even proof-of-stake. However, security issues remain for both proof-of-space and proof-of-stake, indicating a clear trade-off. Although some researchers argue that private or consortium blockchains could be used instead of a public blockchain, it is worth noting that if the major participants reach such an agreement, private or consortium blockchain transactions would become perfectly

editable (if they use proof-of-stake or proof-of-space). This presents a major drawback from a security perspective (especially for financial and other sensitive cases) but would make the blockchain system more energy efficient. Permanent environmental policies are crucial in this regard since they would be more effective due to the persistent pattern of the carbon footprint. Accordingly, green energy could be made mandatory for Bitcoin mining. Alternatively, direct tax could be levied on mining volume to further restrict or contain it.

As Bitcoin is contributing to the production of an environmental crisis, future research could consider whether the entire cryptocurrency universe, including major cryptocurrencies other than Bitcoin, is also responsible for high energy consumption and a large carbon footprint. Carbon credits could be made mandatory (they are voluntary as of now) for cryptocurrency miners, forcing responsible mining. Intuitively, efficient and relatively mature markets have seasoned underlying energy efficiency, which propels them to stay afloat in the long term. Currently, most cryptocurrencies suffer from excess energy consumption. Potentially, an alternate technology other than blockchain may be needed to take Bitcoin to a truly mature stage, given that blockchain seems to suffer from extreme consumption of energy, inability to correct its protocol midway (thus abandoning the entire chain), and relatively low performance (5 transactions/second compared to 1700 transactions/second by Visa) [40]. Moreover, the movement of Bitcoin too is not consistent with the EMH [41], making it even more difficult to predict. Hopefully, the tight competition for Bitcoin mining rewards will spur a technological evolution and thereby a genuine solution to the energy-intensive mining process of Bitcoin.
