Cryptocurrency Mining from an Economic and Environmental Perspective: Sustainable Countries

What is it about?

There are different studies that point out that the price of electricity is a fundamental factor that will influence the mining decision, due to the cost it represents. There is also an ongoing debate about the pollution generated by cryptocurrency mining, and whether or not the use of renewable energies will solve the problem of its sustainability. In our study, starting from the Environmental Performance Index (EPI), we have considered several determinants of cryptocurrency mining: energy price, how that energy is generated, temperature, legal constraints, human capital, and R&D&I. From this, via linear regression, we recalculated this EPI by including the above factors that affect cryptocurrency mining in a sustainable way. The study determines, once the EPI has been readjusted , that the most sustainable countries to perform cryptocurrency mining are Denmark and Ger-many. In fact, of the top ten countries eight of them are European (Denmark, Germany, Sweden, Switzerland, Finland, Austria, and the United Kingdom); and the remaining two are Asian (South Korea and Japan).

Featured Image

Photo by André François McKenzie on Unsplash

Photo by André François McKenzie on Unsplash

Why is it important?

In this context, this article aims to respond to the challenge of ensuring a higher sus‐tainability factor for mining tasks. To this end, it examines, among a very broad set of countries, the profile of those countries that are optimal for carrying out such tasks, giving priority to the sustainability factor. The original contribution of this article is that the anal‐ysis is not only limited to the analysis of the economic viability quantified through the different energy costs, but also incorporates a particularly relevant factor in our day, namely, environmental sustainability, into the analysis. For this purpose, the study adopts a mainly empirical analytical method, through the analysis of frequencies and correlations; 144 countries were considered as the study pop‐ulation, of which 133 finally made up the study sample.