The Profitability of Bitcoin Mining Is Primarily a Matter of Geography. | by Sylvain Saurel | Jul, 2022

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The 10 most profitable countries to mine Bitcoin are in Africa, Middle East and Asia.

A report by 911 Metallurgist, an energy mining consulting firm, provides illuminating data on the state of Bitcoin, but also Ethereum mining around the world.

Listing the full electricity costs to mine a BTC and an ETH, the report shows which countries are making money from mining and which countries are a money pit.

Kuwait takes the top spot in the ranking as it costs only $1,394 to mine one Bitcoin. Here are the top 10 most profitable countries in the world to mine BTC:

The 911 Metallurgist report takes into account two pieces of data, the cost of electricity in a given country and the price of Bitcoin, which has been moving in a lateral range of around $20K since the beginning of May 2022.

The top ten countries on the list are all located in the Middle East and Africa. In the first place, we have Kuwait, which has one of the cheapest power supplies in the world, followed by Algeria ($4,181 per Bitcoin mined) and Sudan ($4,781).

Placed last on the list, the production of one BTC in Venezuela would cost an exorbitant $246,530.74!

A few European countries are under $21,000, such as Sweden, the Baltic countries, and Romania. On the other hand, it is no longer profitable to mine Bitcoin in France today, as a single BTC will cost you over $27,000 to produce.

Kosovo, a Balkan state whose independence has been hotly contested, has provided Bitcoin miners with the perfect combination of cheap electricity and political instability that has led it to become a mining hot spot. Kosovo’s coal-fired power plants provide the 16th cheapest electricity in the world.

However, the ongoing conflict between Serbia and Kosovo over the territory’s sovereignty has led to questionable agreements that have left local governments to absorb the cost of electricity for the northern part of Kosovo.

The essentially free electricity has made Kosovo a particularly attractive destination for mining in recent years. But coal-fired power plant failures and the rising cost of imported electricity have forced the disputed country to ban mining indefinitely. Mining 1 BTC in Kosovo would currently cost about $10,560, which represents a profit of more than $9,500 at current prices.

The United States, one of the largest Bitcoin miners in the world, remains in the middle range, though with huge fluctuations by state. Mining one BTC will cost you $16,000 in Texas, and over $35,000 in California.

While many miners have migrated to Texas in recent months, Texas does not offer the cheapest electricity in America. The cheapest electricity is in Louisiana, where mining 1 BTC costs $14,995. Other Midwestern states such as Arkansas, Wyoming, and Utah require about $16,500 to mine 1 BTC.

Although the cost of mining BTC is roughly in line with the national average, Georgia has reportedly emerged as the leading hub for Bitcoin mining in America. According to estimates by cryptocurrency company Foundry, Georgia accounts for 34.2% of all Bitcoin mining activity in the country, by far the largest share of any state. The outsized mining activity is due to abundant nuclear and solar power as well as a crypto-friendly regulatory environment.

The oversized mining activity in the country is due to favorable regulations that have allowed mining companies to buy cheap solar and nuclear power from local nonprofits at about half the price. Mining 1 BTC with electricity from the Georgian grid would cost just over $13,000, according to the 911 Metallurgist consulting firm.

Again, it all has to do with the cost of electricity, which is drastically different in different parts of the country. We can also see that the ban on Bitcoin mining in China has indeed caused a large migration of Bitcoin mining to America. Something that is going in the right direction, as America’s values are much more in line with Bitcoin’s.

Bitcoin uses Proof-of-Work (PoW) as its consensus algorithm. Ethereum is in the process of migrating with difficulty to Proof-of-Stake (PoS) by moving towards more centralization. This change will surprisingly benefit gamers who will be able to buy high-performance graphics cards at a reduced price that will no longer be used by Ethereum miners.

Until the switch to PoS is complete, 911 Metallurgist explains that the global average cost of producing an Ether is set at $150. This is still profitable since the price is between $1,000 and $1,100 currently. It’s a safe bet that many Ethereum miners will switch to Ethereum Classic Blockchain to take advantage of their equipment without having to sell it all on the market where the supply will be such that prices will drop drastically. This is already a phenomenon that can be observed.

The full report can be found on the 911 Metallurgist website, and I encourage you to read it and draw your conclusions:


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