Browsing by Subject "Cryptocurrencies"

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    Open Access
    Assessing the attractiveness of cryptocurrencies in relation to traditional investments in South Africa
    (2019) Letho, Lehlohonolo; Chelwa, Grieve
    The dissertation examined the effect of cryptocurrencies on the portfolio risk-adjusted returns of traditional and alternative investments using daily arithmetic returns from August 2015 to October 2018 of traditional assets (South African stocks, bonds, currencies), alternative assets (commodities, South African real estate) and cryptocurrencies (Cryptocurrency index (CRIX) and ten other individual cryptocurrencies). This is worth investigating as cryptocurrencies have been performing well while the listed equities in South Africa and most alternative investments have been underperforming (Srilakshmi & Karpagam, 2017). The mean-variance analysis, the Sharpe ratio, the conditional value-at-risk (CVaR) and the mean-variance spanning techniques were employed to analyse the data. The spanning test carried out was the multivariate ordinary least squares (OLS) regression Wald test. The research findings showed that the inclusion of cryptocurrencies in a portfolio of investments improves the efficient frontier of the portfolio of investments and the portfolio of investments risk-adjusted returns. Moreover, the findings suggested that cryptocurrencies are good portfolio diversification assets. However, investments in cryptocurrencies should be made with caution as the risks of investments are high in relation to traditional and alternative investments. The findings of this study advocate for individual and institutional investors to include cryptocurrencies within their South African portfolio of traditional and alternative investments.
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    Open Access
    Evaluating the economic feasibility of using excess energy from photovoltaic (PV) solar plants to mine cryptocurrencies that employ the Proof-of-Work consensus mechanism
    (2026) Mandlate, Helda; Abrahams, Kyle; Kanjere, Julian
    Bitcoin mining is the process by which new Bitcoin transactions are added to the Bitcoin blockchain and the total supply of Bitcoin in circulation is increased. Successful Bitcoin mining heavily depends on the hardware used; older hardware models are generally less efficient, consume more energy and make mining less economical, thereby necessitating frequent hardware upgrades to maintain profitability. In addition, Bitcoin is a Proof-of-Work (PoW) based cryptocurrency, and it is widely accepted that there is an urgent need to reduce the electricity costs and carbon footprint associated with mining cryptocurrencies that rely on the PoW consensus mechanism. While some countries are building renewable energy facilities specifically for cryptocurrency mining, there remains potential to explore the use of surplus energy produced by existing renewable energy sources for this purpose. This study investigates and demonstrates the potential of reducing waste excess energy from solar photovoltaic (PV) plants and redirecting it towards Bitcoin mining, paving the way for more sustainable and profitable mining. This study presents a case study where a 500 MW solar PV plant in South Africa is coupled with a cryptocurrency mine. Here, Bitcoin sales generate $25 million in annual revenue, with a minimum payback period of two years to recoup the investment in Bitcoin ASIC mining hardware. The primary contribution of this research is to highlight the economic benefits of utilising excess solar PV energy for cryptocurrency mining, and possibly removing the need for constant hardware upgrades. A Python-based model is employed to conduct sensitivity analyses on the profitability impacts of various factors, including mining rig types, solar PV plant locations, Bitcoin prices, and energy allocations for cooling; demonstrating the economic feasibility of mining Bitcoin from surplus solar PV energy.