In a recent study by CoinGecko, the costs associated with Bitcoin mining at the household level were analyzed, revealing significant disparities across different regions. The study shows that Europe and Australia are the most expensive regions for mining Bitcoin, followed by the United States. On the other hand, some countries in West Asia and North Africa emerge as the least expensive region for mining.
Bitcoin mining: Delving deep into the costs
Mining a single Bitcoin as a solo miner requires an average of 266,000 kilowatt-hours (kWh) of electricity. To put this in context, this amount is approximately one-sixth of the monthly electricity consumption of an average US household in 2021. The profitability of solo Bitcoin mining is influenced by several factors, including electricity prices, the hash rate of mining equipment, and the overall mining difficulty on the network.
The average cost of electricity to mine a single Bitcoin at the household level stands at $46,291.24. This figure is 35% higher than the average price of Bitcoin in July 2023, which was $30,090.08. Europe has the highest average household electricity cost for mining at $85,767.84, while Asia offers the lowest average cost at $20,635.62. Within Asia, there’s a vast difference between countries, with Lebanon having the lowest electricity cost of $266.20 and Japan standing at a high of $64,111.02.
Globally, solo Bitcoin mining is most profitable in Asia, with 34 out of 65 countries offering profitability based solely on household electricity costs. In contrast, Europe has only five such countries.
Regulatory challenges in Bitcoin mining
Despite the potential for profitability, nine countries have banned cryptocurrency mining, trading, and use as of November 2021. These countries are predominantly in Asia and Africa. Interestingly, all these countries, except Morocco, offer the potential for profitable solo Bitcoin mining.
The most profitable countries for Bitcoin mining, based on low electricity costs, are primarily in Asia and Africa. Lebanon, Iran, Syria, Ethiopia, and Sudan top the list. However, countries like Iran, despite having low electricity costs, have faced challenges like power shortages, leading to periodic bans on Bitcoin mining.
On the other end of the spectrum, 82 countries find Bitcoin mining unprofitable. Europe dominates this list, with countries like Italy, Austria, Belgium, Denmark, and Germany having the highest household electricity costs for mining.
