1. Mining Bitcoin on Household Electricity Most Profitable in Asia, Study Finds
Mining 1 Bitcoin Would Cost $266 in Lebanon, an Italian Miner Would Pay Over $208,000
A solo miner would need an average of 266,000 kilowatt-hours (kWh) of electricity to mint a single bitcoin and the process would take approximately seven years to complete, requiring a monthly electricity consumption of about 143 kWh, researchers have estimated.
While admitting that the days are gone when bitcoin (BTC) could be mined with minimal power and on a desktop computer, they have analyzed household electricity costs across the globe to present prospects for solo miners operating within a decentralized network.
According to the study produced by the crypto asset aggregation portal Coingecko, the average cost of the household electricity needed to mine 1 bitcoin is $46,291.24, which was 35% higher than the average daily price of BTC in July 2023, or $30,090.08.
However, the regional differences in household electricity costs around the world are significant. With an average cost of $20,635.62 per bitcoin, Asia “stands as the sole territory where the average household electricity costs make mining profitable for a solo miner,” the authors point out.
They also highlight the significant disparity between the countries in the region, where Lebanon has the lowest electricity cost of $266.20 and Japan has the highest, at $64,111.02. Nevertheless, half of the top 10 countries where bitcoin mining is most profitable are Asian.
Europe With Highest Average Cost of Household Electricity for Mining
Only 65 countries currently present profitability for solo mining based on household electricity costs alone. Just five of them are in Europe, which has the highest average cost of household electricity, at $85,767.84. Nine of the top 10 most unprofitable countries for solo miners are in that region, with the electricity cost to mint 1 BTC in Italy reaching $208,560.33.
Various factors have contributed to the increase of household power rates on the Old Continent, including the spike in wholesale electricity prices amid the Covid-19 pandemic, growing demand, heatwaves, and Russia’s invasion of Ukraine which affected natural gas deliveries for a number of EU member states.
The researchers also emphasize that the hourly amount of electricity used in the mining of 1 BTC, 4.6 kWh, is not as disparate as one might think when compared to the consumption of other household appliances such as an electric kettle, with 3.5 kWh, or a clothes dryer that burns an average of 5 kWh. Also, the monthly electricity required to mint a single bitcoin is roughly one-sixth of what a typical household in the U.S. consumed in 2021.
2. Bitcoin Mining’s Costly Quest: Exploring Most Expensive Countries
Bitcoin mining, once considered a decentralized and cost-effective process, has evolved into an industry that requires significant resources, with electricity and hardware costs being key factors. Recent data revealing the most expensive countries to mine a single Bitcoin (BTC) highlights the intricate relationship between energy prices, infrastructure, and regulatory environments.
Topping the list is Italy, where the cost of mining one Bitcoin reaches a staggering $208,560. This high expense can be attributed to Italy’s relatively high electricity costs and stringent regulations on energy consumption. While the country’s picturesque landscapes may captivate, its expensive mining landscape is less appealing to crypto enthusiasts.
Austria follows closely, with a mining cost of $184,352 per Bitcoin. The nation’s commitment to renewable energy has not necessarily translated into lower electricity costs, due to the complexities of energy distribution. This sheds light on the nuanced dynamics between green energy policies and their impact on the mining sector.
Belgium and Denmark, at $172,382 and $166,795 respectively, demonstrate that European countries dominate the upper echelons of mining expenses. These figures underscore how proximity to economic hubs and advanced technological infrastructure can inadvertently lead to higher operational costs.
Germany, with its established industrial prowess, faces a mining cost of $163,337. The paradox here lies in the country’s advanced technology and access to resources, juxtaposed against the considerable costs involved in maintaining mining operations. The need to balance innovation with economic feasibility is evident.
Further down the list, the United Kingdom stands out with a mining cost of $130,616. This is indicative of the nation’s diverse energy landscape, coupled with regulatory efforts to curtail excessive energy use. Conversely, the presence of the Cayman Islands, a renowned offshore financial center, at $128,222 raises questions about the interplay between tax havens and cryptocurrency mining.
Lithuania, Netherlands, and Ireland occupy mid-tier positions with mining costs ranging from $137,799 to $152,164. These figures highlight the impact of factors such as energy sourcing, climate, and government policies on a country’s mining competitiveness.
Bitcoin’s Pricey Endeavor
The data sparks conversations about the global nature of cryptocurrency mining. As costs vary significantly across borders, miners might be tempted to relocate operations to more favorable environments. Yet, such shifts could potentially strain energy infrastructures and alter local economies, necessitating a delicate balance between innovation and sustainability.
In conclusion, the exorbitant costs associated with mining Bitcoin in various countries provide a lens through which to examine the intricate interplay of energy pricing, infrastructure, and regulations. As the crypto landscape continues to evolve, these insights will likely influence strategies for both miners and policymakers, ultimately shaping the future of Bitcoin mining.
Oman’s Visionary Leap Into Bitcoin Mining
The Oman Ministry of Transport, Communications, and Information Technology has unveiled a cutting-edge data hosting and bitcoin mining center. With an investment of $370 million, equivalent to RO135 million, Oman is keen on expanding its foothold in the bitcoin mining sector ahead of the upcoming halving.
The country’s systematic approach to evolving its infrastructure and regulations underscores its aspiration to become a central hub for bitcoin miners.
Exahertz International, an offshoot of Afaaq for Advanced Technologies, masterminded the development of this facility. The expansive area, spanning 312,000 square meters, presently harnesses about 11MW of capacity. This substantial power source drives over 2,000 mining machines. The ministry aims to increase this number to 15,000 machines by October.
During the centre’s inaugural event, Afaaq for Advanced Technologies received praise from the Minister, Eng Said Hamoud al Maawali. He commended the company, emphasizing its pivotal role in data hosting and processing. Minister al Maawali stated:
“We envisage them as a cornerstone of Oman’s burgeoning digital economy.”
There is a strong recognition that bitcoin mining will be a catalyst for economic growth. A partnership with Bitmain Technologies, a Chinese manufacturer, has strengthened the facility. Bitmain, celebrated for crafting high-caliber computers, incorporates hydro technology for cooling, an essential feature given the significant heat generated by bitcoin mining devices. The incorporation of Bitmain’s advanced hardware positions Oman’s data center at the apex of efficiency and performance.
Oman’s journey in this domain isn’t emerging. Al-Madina Al-Khadraa, its maiden data center, unveiled in November 2022, commanded an investment nearing RO 150 million, or roughly $390 million. These large investments resonate with Oman’s strategic vision – bolstering employment and carving a niche as a sought-after destination for regional bitcoin miners.
Eng Al Maawali applauded these centers as a watershed moment in Oman’s digital journey. He foresees them as catalysts, galvanizing the nation’s digital economy while unveiling opportunities for the people of Oman.
Sam Ferdos, CEO of Moonwalk Systems and a strategic ally of Exahertz International, highlighted the ongoing pilot phase. This critical phase is earmarked for testing and environment evaluation, ensuring any essential modifications are identified to bolster the center’s efficacy and sustainability. Feedback from this pilot will shape future blueprints. There’s an accelerated momentum to introduce three additional sites in Salalah and an Al Jabal Al Akhdar facility within the Al Dakhiliyah governorate.
In tandem with infrastructure growth, there’s a parallel focus on workforce talent. Exahertz envisions disseminating blockchain knowledge among the locals, equipping them for roles within these data centers. Government-backed internship programs further aim to attract the Omani youth.
Oman’s holistic embrace of bitcoin is multifaceted. Infrastructure development is complemented by regulatory measures ensuring a robust ecosystem. The Capital Market Authority of Oman recently encouraged industry insiders to voice their insights on a draft focusing on business prerequisites and curbing market malpractices. This consultation ended on August 17 and sets the stage for a comprehensive regulatory framework for digital assets, ushering Oman into the league of bitcoin-regulated nations.