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Best Countries to Mine Bitcoin

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With power the main resource in Bitcoin mining, miners in different countries continue to struggle to remain afloat amid major inconsistencies in global energy prices. They have to look for countries with cheap and alternative energy while still considering the economic and political stability of the country where they intend to run their operations. 

Besides, with the halving coming up in April 2024, they will have to look for more energy-efficient places to set their miners and operate even leaner to survive. 

So, what’s the best place for Bitcoin mining?

This article will reveal the best countries to mine Bitcoin, the risks and opportunities, and the pros and cons of each location. 

First, let’s look at what determines a favorable location for Bitcoin mining.

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The Bitcoin network uses a proof of work (PoW) algorithm to validate transactions. With this consensus mechanism, miners must solve complex cryptographic puzzles using high-power computers. The computers generate a lot of heat and thus require high-velocity fans to cool them. Consequently, the block validation process becomes pretty energy-intensive, and that’s what makes electricity the most critical factor in Bitcoin mining. 

Since power costs account for the lion’s share in Bitcoin mining expenses, miners look for countries and states with low electricity rates. They also consider the type of energy used in these locations as part of the effort toward green Bitcoin mining. That way, the overall mining expense is minimized and mining operations become more environmentally friendly and profitable.

Regulatory Environment

Although Bitcoin has been around for over a decade now, the cryptocurrency industry is still relatively new. Thus, it lacks a clear regulatory framework or accepted international standards for cryptocurrency. As a result, specific countries are forced to adopt their policies on taxation and regulation of crypto-related activities, including mining. 

For instance, China issued an outright ban on anything related to cryptocurrency, while others like Taiwan, Colombia, and Iran instituted partial bans. Bitcoin miners must, therefore, think about the regulatory environment of countries and states where they wish to carry out their mining operations. 

Climate

Cooling is a critical aspect of Bitcoin mining operations. The mining rigs generate large amounts of heat which necessitates investing in cooling infrastructure. However, miners can save on cooling expenses by setting up mining operations in cooler climates. They can reduce the need for cooling fans or immersion cooling systems and channel most of their megawatts to mining.

Infrastructure and Political Stability

Besides supportive policies for Bitcoin mining, countries need to create an enabling political environment and efficient systems that support crypto mining. These include political stability and infrastructure like electricity and renewable energy systems, as well as internet connection. With a stable political environment and efficient infrastructural systems, a country will be more attractive and viable for uninterrupted mining operations.

 

Best Countries to Mine Bitcoin

Algeria

Algeria is the cheapest country in Africa to mine Bitcoin. This explains why the Tasmanian Times reported in June 2022 that Algeria accounted for up to 10% of the global Bitcoin mining market. The Algerian government has yet to establish stable regulations for Bitcoin mining and the larger crypto space. However, this has in no way hindered the surge in Bitcoin mining as the country has all the right conditions for Bitcoin mining. 

First, Algeria enjoys a favorable climate for Bitcoin mining, and above all, it has some of the lowest electricity prices in the world. On average, households pay $0.039 per kWh, while businesses pay $0.033 per kWh. Miners pay an average of $4,183 to mine one Bitcoin. With Bitcoin’s value way above the cost of mining, it leaves mining in Algeria a highly profitable venture.

Pros and Cons of Bitcoin Mining in Algeria

Pros

  • Low electricity prices

Cons

  • Heavily dependent on fossil fuel energy
  • Underdeveloped renewable energy infrastructure

Bitcoin Mining Opportunities and Risks in Algeria

While Algeria is heavily reliant on fossil fuel energy and can maintain low power rates for households and businesses, it has a massive potential for renewable energy. For instance, Algeria has a high solar irradiance level and can generate up to 2100 kilowatts per hour in its desert lands. Renewable energy could help stabilize the grid and lower power costs further. 

On the contrary, the country generates surprisingly low amounts of electricity from solar and other renewable energies. Only 448 MW are generated from solar annually, with 228 MW from hydro and 10 MW of wind power.

However, while Algeria presents exciting opportunities for the growth of renewable energy and Bitcoin mining, it could only be a matter of time before the government realizes and imposes restrictions. Therefore, as much as it provides the perfect conditions for Bitcoin mining, it’s hard for investors to know what the future holds in terms of government policies.

Ethiopia

Ethiopia is also among the countries with low renewable energy capacities despite running three wind power plants in different parts of the country. According to the International Trade Administration, only 8% of its power capacity comes from wind energy, with 2% coming from thermal sources. The remaining 90% is drawn from hydropower. 

Regardless, Ethiopia ranks as one of the best locations for Bitcoin mining, primarily due to its relatively low energy costs. Visual Capitalist’s report indicates that miners spend about $7,169 to mine one BTC in Ethiopia. 

Notably, the Ethiopian government has previously shown positive sentiments about cryptocurrency. In June 2022, the central bank issued a directive for all crypto operators, requiring them to register with the Information Network Security Administration. The move signals the government’s readiness to develop digital currencies while protecting its citizens from crypto-related crimes. 

Pros and Cons of Bitcoin Mining in Ethiopia

Pros

  • Favorable energy tariffs
  • Positive government sentiments
  • Stable grid power

Cons

  • Low renewable energy infrastructure
  • Unclear regulatory framework
  • Underdeveloped infrastructure
  • Low electricity connection in rural areas

Bitcoin Mining Opportunities in Ethiopia

With a positive regulatory framework and competitive power prices, Ethiopia provides a unique potential for Bitcoin mining activities. Ideally, the country has the most critical resource, so investors who are willing to deploy the lacking infrastructure, such as data centers with stable internet bandwidths can run profitable Bitcoin mining operations in the country. Besides, Ethiopia is heavily endowed with renewable energy sources that are yet to be fully exploited.

Kazakhstan

Kazakhstan rose to be a leader in Bitcoin mining in 2021 after the collapse of cryptocurrency in China. Bitcoin miners in Kazakhstan enjoy a supportive regulatory environment and an abundance of energy resources that allow Bitcoin miners to mine Bitcoin for $8,762 per BTC. The country suffered a setback due to Bitcoin’s energy-intensive nature, forcing nationwide power outages and power rationing in 2022.

However, it’s still a stronghold in Bitcoin mining, with the largest Bitcoin mine located in Ekibastuz. The government caps energy prices in the country between $0.02 and $0.03 per kWh. Additionally, it’s among the countries that recognize cryptocurrency and have an established framework for crypto and crypto mining activities. Bitcoin miners can thus enjoy profitable crypto mining in a regulated environment. 

Finally, the country experiences favorable temperatures for Bitcoin mining for most of the year. Temperatures can drop to as low as -20 degrees Celsius during winter in the North.

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Pros and Cons of Bitcoin Mining in Kazakhstan

Pros

  • Competitive power prices
  • Established legal framework
  • Favorable climate for Bitcoin mining

Cons

  • Reliance on fossil fuel energy
  • Potential effect of government policies

Bitcoin Mining Opportunities and Risks in Kazakhstan

Bitcoin mining in Kazakhstan has seen its highs and lows already, even without factoring in the crypto winter. The country’s grid was strained after an influx in Bitcoin mining activities, forcing the government to adopt power rationing programs. 

While it’s rebounding, the new legislation poses yet another risk for Bitcoin miners. For instance, from 2024, miners will be required to sell 75% of their assets through registered exchanges in a bid to curb tax evasion. Consequently, miners are still at a crossroads on whether the new regulation will have positive impacts on their mining operations. 

The USA

For a while now, the United States has cemented its position as the global leader in Bitcoin mining. Going by 2023 mining statistics, the US alone contributed over 38% of the total Bitcoin network hash rate. Even though the average cost of mining one BTC is estimated at $21,089, it’s still a booming Bitcoin mining hub for a couple of strategic reasons.

First, most of the US states are pro-crypto and have supportive legislation for Bitcoin mining and everything related to crypto. For instance, Texas has already set itself apart as the crypto capital in the US, contributing more than 28% of the total hashing power of the US. Notably, investors in Texas enjoy permissive regulation for Bitcoin mining and an abundance of green energy. The state generates more power from wind and solar than any other US state.

Second, the country has access to facilities and infrastructure for Bitcoin mining, including internet connections, Bitcoin mining data centers, and professional mining hosting companies like EZ Blockchain

Pros and Cons of Bitcoin Mining in the US

Pros

  • Supportive regulation
  • Access to alternative energy sources, including renewables
  • Access to Bitcoin mining data center hosting solutions

Cons

  • Limited access to renewables in some states
  • Varying energy costs in different states

Bitcoin Mining Opportunities and Risks in the US

While the average cost of mining Bitcoin in the US is high compared to countries like Kazakhstan and Georgia, there’s still a huge potential for Bitcoin mining in the US in the future. The country enjoys political stability, a supportive regulatory environment, and access to the necessary infrastructure for Bitcoin mining. 

Additionally, hosting companies like EZ Blockchain are providing innovative solutions that are helping lower the cost of mining. For instance, besides providing immersion cooling that saves on energy used in cooling, the company explores alternative energy sources of stranded and flared gas on oil fields. Such solutions are helping lower mining costs while ensuring clean Bitcoin mining. 

Georgia

The cost of mining one BTC in Georgia is estimated to be $13,143. While it is quite high compared to other locations like Algeria and Kazakhstan, it’s still a great location, especially for miners with a sharp focus on green Bitcoin mining. Only 2% of the country’s total energy supply comes from coal and natural gas, with 70% drawn from hydropower. 

Besides the relatively low energy prices of $0.075-$0.11 per kWh, miners in Georgia operate in an unregulated and business-friendly environment. However, the National Bank of Georgia regulates crypto taxes, and Bitcoin mining companies must apply for licenses before they can start their operations. With a supportive government and an abundance of hydroelectric power, Georgia joins the list of the best countries in the world to mine Bitcoin today. 

Pros and Cons of Bitcoin Mining in Georgia 

Pros

  • Competitive energy prices
  • Clear regulatory framework
  • Favorable climate for Bitcoin mining
  • Favorable tax regime

Cons

  • Overreliance on hydroelectric power

Bitcoin Mining Opportunities and Risks in Georgia

The potential for Bitcoin mining in Georgia is unlimited. The government acknowledges cryptocurrency and even allows Bitcoin ATMs in Georgia. With the Georgian state electricity producer looking to expand its hydropower capacity from 4600 MW to nearly 10,000 MW in the next ten years, energy prices could be lower in the future and accelerate Bitcoin mining activities in the country.

Let’s mine together! 

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Final Word

Bitcoin mining has been a controversial subject over its relationship with the environment. As an energy-intensive process and with most countries largely dependent on fossil fuel energy, Bitcoin mining poses an environmental and sustainability threat. Energy prices have also been a concern as skyrocketing global energy prices render mining activities unprofitable. As such, miners are forced to look for cheap energy that makes their activities profitable and minimizes the carbon footprint. 

Eventually, renewable energy sources will help relieve the national grid and ease electricity rates. But it’s only in countries that manage to build the infrastructure to explore renewable sources like wind, solar, and gas. For now, miners are more concerned with the best energy rates, and this explains why Algeria and Ethiopia are the best places to mine Bitcoin today.  

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