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Sustainable development and cryptocurrencies as private money


Cryptocurrencies were initially promoted on their ability to operate in a fair and equitable manner free from financial institutions and governments. This paper evaluates sustainability issues facing cryptocurrencies in their functions as a form of private money. Specifically, we focus on their claims around inequality and poverty reduction using the United Nations Sustainability Development Goals framework. Our findings suggest that although the technologists believed they produced suitable alternatives to traditional money, there are a number of issues in regards to the sustainability of this form of finance. The major areas of the shortfall are around an energy usage perspective, the reward system for transactors to those with access to greater computer power (inequality) and issues over loss sharing when exchanges or user nodes are hacked and digital wallets are lost.

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Source: OECD (2000)

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Data source:


  1. Note cryptocurrencies can be used for a variety of functions. Our focus is simply on cryptocurrencies that aim to operate as a form of money.

  2. A distributed ledger is based on the concept of maintaining multiple copies of the same records at different physical locations. These records can be sighted by all who maintain them and are verified and updated by consensus of the majority of ledgers.

  3. A blockchain is a set of linked, encrypted and digitally encoded groups of transaction records (blocks) that are validated and updated on a consensus basis by all who participate in the maintenance of the system. Each block is added to the front of the previous block in a time stamped sequence and cryptographically encoded so it is tied to its preceding blocks in a chain forever.

  4. Public keys are the alphanumeric identities which are used to associate each digital token with some anonymous “owner”. Private keys are the (generally 64 digit) code, known only to the “owner” which is required to be entered by the owner to affect a transfer of ownership to another party. Loss of the private key means loss of digital tokens (such as would occur by burning of bank notes).

  5. The price of Bitcoin has been volatile. As at the 1st January 2017 Bitcoin was priced at USD$997.69 per bitcoin but by the 19th December 2017 it was some USD$18,809.52 and by the 28th November 2018 it dropped to USD $3,813.70 and as off September 2019 it has risen back over $10,000 (

  6. Note the DAO refers to the software-based rules and algorithms used to process and secure the records on a blockchain or similar distributed ledger, not to be confused with investor-directed venture capital firm that was hacked in 2016.

  7. Central banks are open to implementing a digital cryptocurrency form of money in the future.

  8. The double spend problem is the possibility that an owner of cryptocurrency token could undertake a transaction to purchase some item involving transfer of the token ownership to the counterparty, and then undertake another transaction with a third-party involving transfer of ownership of the same token. If there are lags in the recording of the initial ownership transfer, then a duplicitious individual could engage in a “double spend” of the same token, creating either loss for one of the counterparties when the second transaction was attempted to be registered, or complications for the ledger process. Because the identity of the holder of the token is not known (other than by a public key), obtaining restitutions is highly problematic. Because the token is the liability of no person or entity, there is no issuer against whom recompense could be sought.

  9. Bitcoin, whilst enormously popular as a speculative investment also enjoys a reputation as a very private place to transact without the disclosure of identity and ownership but is also opaque to government or regulatory authorities. Bitcoin as do some others have suffered from a poor reputation as a place to launder or hide money from government due to its excellent cryptographic properties that keep transactions.



  12. Monetization occurs when the central bank prints money to buy bonds issued by the government treasury.

  13. All cryptocurrencies propose strict limits and even absolute caps on the quantity of cryptocurrency that will be created.


  15. Charlie Lee who developed the cryptocurrency Litecoin claims to operate it fairly for users and miners unlike some other cryptocurrencies where developers were aiming to become rich (Lee 2019).


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Correspondence to Kym Brown.

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Vaz, J., Brown, K. Sustainable development and cryptocurrencies as private money. J. Ind. Bus. Econ. 47, 163–184 (2020).

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  • Cryptocurrencies
  • Sustainability
  • Inequality

JEL Classification

  • E42
  • G23