Many people think Bitcoin mining is worthwhile despite the high startup costs. Let’s take a look at the cost of mining Bitcoin in 198 different countries and see if it really is worthwhile.
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Given the significant energy requirements for mining bitcoin, it can be expensive to get started. However, as Carmen Ang of Visual Capitalist explains below, actual costs vary according to location and local electricity rates.
Where can I mine this well-known cryptocurrency for the least and greatest money? The expected cost of mining bitcoin globally is shown in this 911 Metallurgist image using prices and relative costs as of March 23, 2022.
How Does Bitcoin Mining Work?
Before continuing, it is important to quickly go through the fundamentals of bitcoin mining and the reasons it uses so much power.
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When a person mines for bitcoins, they are actually adding and validating a new transaction record to the blockchain, the decentralized bank ledger wherein bitcoin is traded and distributed.
Crypto miners must solve a challenging equation that the blockchain system established in order to establish this new record.
Thousands of miners can be competing to solve the same puzzle at any particular time. (Except if you are a member of a mining pool, which is simply a group of miners who decide to join efforts to maximize their chances of solving the equation.) Only the first individual to solve the equation receives a payout.
Since winning chances increase with computation speed, solving the equation first needs sophisticated hardware that consumes a lot of energy.
The Costs and Profits of Mining Bitcoin in 198 Countries
The average cost of mining bitcoin across the 198 nations in the dataset was $35,404.03, which was higher than the coin’s worth of $20,863.69 on July 15, 2022. Although it is vital to keep in mind that shifting energy costs and a higher or lower number of miners on the bitcoin network constantly alter the required energy and overall cost.
On March 23, 2022, the price to mine one bitcoin in each nation was as follows, along with the potential profit after deducting mining costs:
The most expensive nation overall to mine bitcoin is Venezuela. In the South American nation, mining a single bitcoin costs a staggering $246,530.74, making it clear that the activity is not at all profitable. Due to the high cost of energy in the nation, mining only one bitcoin would cost miners $225,667.05.
On the other hand, Kuwait is the least expensive location to mine bitcoin. In Kuwait, mining a single bitcoin costs $1,393.95, so the potential revenue for miners is $19,469.74.
With an average cost of around 3 cents per kWh, the Middle Eastern nation offers some of the lowest electricity prices in the entire globe. To put things in perspective, one kWh typically costs 21 cents in North America.
The Race is On
Numerous people think bitcoin mining is worthwhile despite the high startup costs.
Since there are only 21 million coins available for mining and more than 19 million have already been mined as of the publication of this article, bitcoin’s limited supply is one feature that makes it highly desirable.
Even though bitcoin’s (BTC) price is infamous for being volatile, its worth has increased considerably over the past ten years. And the price of bitcoin might increase even further if cryptocurrencies gain widespread acceptance, as many people anticipate they will.