Cryptocurrency miners are considered one of the major drivers of the crypto industry, but the recent market downturn has questioned the profitability of once profitable businesses.
Falling crypto prices and rising electricity costs around the world mean that miners are operating with very narrow margins, and some may not even be making any profits. I have. report From a 911 metallurgist on mining costs.
The report estimates how much it will cost to mine the top three most popular PoW cryptocurrencies: Bitcoin (BTC), Ethereum (ETH) and Dogecoin (DOGE).
This study examined the average price per kWh in all countries of the world and compared it to the energy required to mine all of these tokens. After subtracting the average market price of tokens, researchers were able to get a rough estimate of how profitable the mining industry is around the world.
Various costs of cryptocurrency mining around the world
Bitcoin mining is a highly contested topic these days, and many governments and environmental groups have criticized its high energy requirements. While most of the data shared by critics can be characterized as misleading, there are countries in the world where Bitcoin mining is economically and energetically infeasible.
According to a study by 911 metallurgists, it costs more than $ 246,500 to mine 1 BTC in Venezuela. Due to the recent market downturn, Bitcoin prices have fallen to around $ 20,000, making Venezuela the worst country to mine BTC. Mining ETH domestically is beneficial, but the estimated cost is around $ 1,000 and the price of ETH is now just above $ 1,100, allowing miners to reach the break-even point.
The small island nations, where generous tax laws have made them a popular destination for crypto companies, are less welcoming to the mining industry. Mining 1 BTC in the Solomon Islands currently costs around $ 142,500. Bitcoin mining is not possible because Antigua and Barbuda, Micronesia, Kiribati, Marshall Islands, Maldives, Samoa, Banuatu, Dominica and Tonga all have very high electricity prices. Mining a single Bitcoin in any of these countries costs $ 70,000 to $ 89,000.
However, in countries where electricity is cheap and abundant, cryptocurrency mining has become a very useful initiative.
Kuwait is the most profitable country to mine Bitcoin, and the report estimates it will cost about $ 1,390. If the current market price is just over $ 20,000, this is a profit of $ 18,610. Algeria and Sudan cost between $ 4,200 and $ 4,800, and both countries offer more than $ 15,000 in profits.
In Yemen, Ethiopia and Kyrgyztan, it costs about $ 7,160 to mine a single Bitcoin, but if you do the same in Angola, Qatar will bring the miner back $ 7,360.
China, which once accounted for more than three-quarters of the total hash rate of Bitcoin, is no longer a former mining hub. The ban introduced by the country’s central bank in 2021 expelled all mining operations in the country.
Some have moved to neighboring Kazakhstan to take advantage of Kazakhstan’s abundant coal power generation, but many have turned to less popular places with cheaper electricity. Some countries were favorable in anticipating the influx of miners and passing legislation banning mining before major businesses were established. Home to the 14th lowest electricity rate in the world, Iran has imposed a temporary ban on Bitcoin miners after rolling blackouts in several cities due to the influx of farms.
Kosovo on the Balkan Peninsula, where independence is fiercely contested, has provided Bitcoin miners with the perfect combination of cheap electricity and political unrest, which has become a hotspot for mining. Kosovo’s coal-fired power plants provide the 16th cheapest electricity in the world. However, the ongoing debate between Serbia and Kosovo on land sovereignty led to a suspicious agreement that left local governments to absorb electricity costs in northern Kosovo.
With essentially free electricity, Kosovo has become a particularly attractive mining destination in the last few years.However, due to the shutdown of coal-fired power plants and soaring import electricity, conflict-affected countries have become introduction An indefinite ban on the mining industry, according to Reuters. Mining 1 BTC in Kosovo currently costs around $ 10,560 and yields over $ 9,500 in profits.
Emigration of great miners to the United States
Following the controversial ban on mining in China, a significant number of large-scale mining operations have called on the United States to evacuate. Many miners have moved to Texas and Wyoming in search of vast land, good infrastructure, and low electricity prices. The abundant electricity in both states means that the mining cost of 1 BTC is about $ 16,500, and even if the price of Bitcoin remains at about $ 20,000, it will bring a profit of about $ 3,500.
However, despite the growing number of miners migrating there, Texas does not offer the cheapest electricity in the United States. Instead, you can find the cheapest electricity in Louisiana. In Louisiana, mining 1 BTC costs $ 14,995. In other Midwestern states such as Arkansas, Wyoming, and Utah, it costs about $ 16,500 to mine one BTC.
Georgia is reportedly in line with the national average of Bitcoin mining costs. Appeared As the U.S.’s leading crypto mining hub, Bloomberg quoted cryptocurrency company Foundry earlier this year, with Georgia miners accounting for more than 34% of pool computing power and 17% of Bitcoin’s total hash rate. Reported to occupy.
Large-scale mining activity in the country is due to favorable regulations that allow mining companies to buy cheap solar and nuclear power from nonprofits in the region for about half the price. According to 911 Metallurgists, mining 1 his BTC with electricity from the Georgia grid costs just over $ 13,000.