Are Virtual Currencies Virtuous? Ethical and Environmental Issues

Abstract

Cryptocurrencies have gained in popularity and generated a great deal of enthusiasm in recent years with regard to the sustained increase in the number of transactions achieved by miners. On what scale can we consider the process and uses of virtual money to be ethical? What are the misuses related to their use? In this chapter, we study the ethical and environmental issues of cryptocurrencies. First, regarding the environmental issue, the major cryptocurrencies use a large amount of electricity for mining, which has a significant impact on the energy production system and global warming. Second, we discuss the new type of Dark economy that has emerged with these currencies, thanks to the anonymity of transactions. We particularly emphasize the unethical use of cryptocurrencies, namely the virtual money laundering and tax evasion, the financing of illegal activities (i.e. illicit products, terrorist financing) and cyber-attacks. Third, we develop the ethical use of virtual money and show that this kind of currency, which guarantees the protection of privacy and anonymity of transactions, can be a good solution to mitigate transaction costs and reduce poverty. They can also be beneficial in the context of debt crises and hyperinflation. Thus, cryptocurrencies per se are not evil; it is their uses that can be.