Top places with the best electricity rates for cryptocurrency mining
Crypto mining is an extremely expensive and competitive process, requiring a significant amount of computer power and electricity. At this very moment, the price of a single bitcoin is trading below the $4,000 mark. So, with that in mind, how much profit can you actually make through mining?
All miners may have access to the same tools, however, they do not have access to the same electricity rates. The average global electricity rate is currently 14 cents per kilowatt-hour (kWh). Let’s take a look at the list of the areas where mining is the most profitable.
It is estimated that 74% of all bitcoin mining is conducted in China. This is mainly due to its cheap electricity rates, which usually hover around six cents per kWh throughout the year. Given the vast amount of space, people, and resources in the country, it is no surprise that most bitcoin mining is conducted there.
China has been able to provide cheap electricity through the use of various hydro-dams. Places in which populations were expected to expand, but didn’t, were taken over by miners to utilize cheap rates in the region. However, even China is currently being affected by the drop in cryptocurrency values as two of the world’s largest crypto companies, Bitmain and Huobi, have planned for layoffs in the following months.
With electricity rates increasing for miners across the globe, and the value of cryptocurrencies decreasing, it has become necessary to move shop. Many in the industry see a future for mining in Iran. Electricity rates in Iran are about three cents per kWh, about eleven cents lower than the global average. Good, right? Not necessarily.
Consider the region at the moment. A variety of sanctions have been implemented by the U.S. government against Iran, which could be troublesome for miners. Also, for the first time ever, the U.S. government released the bitcoin addresses of two Iranian men who were involved in the Samsam ransomware attacks. Although not directly correlated to mining, these issues could prove problematic for future mining in the country.
Cryptocurrency mining in Canada significantly expanded in 2018. Quebec, known for its cheap electricity rates, has seen an increase of miners entering the area. Besides cheap electricity, renewable energy has been another reason many are entering Canada’s mining market.
Renewable energy is providing a more sustainable source of electricity for miners, and Canada is on the forefront. Besides these factors, the weather also plays a role. Colder environments allow miners to spend less on cooling systems for their computers. Canada has cold winters, and cooler summers make it ideal for the systems required in mining, which are often prone to overheat quickly.
The future of mining
Think about how much money is necessary for mining. You need powerful equipment, which requires a substantial amount of electricity to operate, a building, and people to supervise the mining process. Cryptocurrencies such as bitcoin need to be valued between $4,500-5,000 in order for them to be profitable.
Not surprisingly, this year’s cryptocurrency market plunge has caused many mining companies to close their doors. But as cryptocurrency markets improve, we can most likely expect the mining industry to improve next year, too.