Raw materials in this article
Forex in this article
• Energy-intensive research process under criticism
• China puts an end to bitcoin mining
• Profitability in country comparison
After regulation: China is no longer a mining operation
Cryptocurrency mining has been heavily criticized lately. A significant amount of energy is required for the mining process of Bitcoin & Co., which suppresses the environmental balance of cybercurrencies. In June 2021, the People’s Bank of China raised concerns about the environmental impact of the cryptocurrency and financial risks from its speculative nature and criminalized cryptocurrency mining. For local mining companies, this meant looking for new locations. When selecting new branches, a country’s energy prices play a major role in being able to operate profitably. For example, Kazakhstan, but also the US state of Texas, are popular locations for the industry because of the low electricity prices there.
The raw materials portal “911 Metallurgist” has now determined in which countries it is particularly cheap to mine Bitcoin – and where mining is associated with high costs. The website points out that the price of electricity can determine whether the company is profitable or not. For this purpose, the cost to mine a bitcoin was determined and subtracted from the current exchange rate of the internet currency. Most recently, the coin cost about 19,000 US dollars. The data is per 13 October 2022.
Bitcoin mining is nowhere more expensive than in Venezuela
Venezuela ranks last of the 198 countries surveyed. This makes the South American country the most expensive place for Bitcoin mining. Here, the cost of mining one bitcoin is currently around $246,000, as determined by 911 Metallurgist. At the current Bitcoin rate, that means a loss of almost $227,000. For a long time, the process there was considered very cheap, as many residents of the indebted country took advantage of the low energy prices to earn some extra money with Bitcoin & Co., as “CNBC” reported in 2017. However, mining for cybercurrencies has only been official allowed there since 2020. Since then, miners have needed a government license to participate in the national mining pool, according to crypto portal Bitcoin2Go. 911 Metallurgist does not explain what the high mining costs are related to. But the acquisition of the license, a slow Internet connection and power outages reported by “Euronews” increase the pressure on local market participants.
Venezuela is followed by the Solomon Islands, Antigua and Barbuda, the Federated States of Micronesia and Kiribati. Here, the losses per mined Bitcoin are between 63,000 and 123,000 US dollars.
Kuwait attracts Bitcoin miners with cheap electricity prices
At the other end of the ranking is Kuwait. This allows miners in the Arab country of the Persian Gulf to achieve the largest profit per Bitcoin. At a price of around $1,393 per Bitcoin mined, local businesses still have about $17,700 in profit at the current exchange rate. The low financial costs are probably due to the region’s extensive oil reserves, which also benefit electricity prices. Bitcoin in Kuwait is not considered a means of payment by the government, nor can local financial institutions process transactions, according to a report by the AI and blockchain conference “AIBC”. However, mining of internet coins is not prohibited. According to this, no tax must be paid on the income of individuals, but companies in the mining sector must pay tax on 15 percent of their income.
The next top countries for bitcoin miners, according to 911 Metallurgist, are Algeria, Sudan, Yemen and Ethiopia. Profit of between about 11,900 and 14,900 US dollars per Bitcoin mined are possible here. With a profit of almost 10,300 US dollars, Kazakhstan only ranks tenth among the best mining countries.
Not Texas: Louisiana with the highest mining rate in the US
In addition, the portal has also applied its calculations to the 50 states of the United States and the district of Washington, DC. Bitcoin mining is therefore most expensive in Hawaii, Alaska, Connecticut, Rhode Island and Massachusetts. Here, miners must accept losses of up to 35,000 US dollars per Bitcoin. However, the situation is different in Louisiana, Oklahoma, Idaho, Utah and Wyoming. According to the portal, miners in the leading American state of Louisiana can look forward to a profit of more than 4,000 US dollars per Bitcoin. But between 2,600 and 3,900 US dollars per token is also possible in the other cities mentioned. The state of Texas, which has long been considered a new crypto-Eldorado, only occupies ninth place in the ranking. The southern state is also feeling the effects of the energy crisis and can no longer keep its electricity prices at the once low level. Nevertheless, around 2,400 US dollars per mined Bitcoin jump out here.
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