Today, mining centers around the fastest Internet connections and the cheapest energy source – whether or not the energy is ‘green’. Researchers at the University of New Mexico have evaluated the climate damages and related monetary losses for mining four top cryptocurrencies – BTC, ETH, LTC, and XMR – in the United States and China in 2016-2018. They studied the impact of mining on the mortality rate, climate and health damages. You can find the results in the table below:
The study shows that mining the top four cryptocurrencies leads to major ‘crypto damages’ – this term is used to denote the impact of cryptocurrencies on our health and climate. It turned out that each $1 of Bitcoin earned by miners in 2018 alone led to ‘crypto damages’ of $0.49! Let’s find out how this number was calculated.
The researchers divided the numbers in the first table (mining damages in dollars) by the market price of each cryptocurrency to obtain the size of the damages in monetary terms for each dollar of the cryptocurrency. You can see how this indicator changed in the chart below:
This kind of volatility is created by two factors: the price of each coin and the cost of electricity. Thus, in 2016 both factors were low, keeping damages from mining coins at approximately 21%. As of December 31, 2018, the impact of BTC mined in the United States was evaluated at 95% of the price of the coin.
By the way, unlike mining, minting has no negative impact on the environment: the entire minting process occurs on your smartphone, without the need for expensive equipment or electricity costs. You can find more information on the minting process used in Power Minter here.