What are the costs for mining Bitcoin?

Recently, a research by NFT Evening was published that reveals the costs of Bitcoin mining country by country.

The research examines almost all the countries in the world and estimates for each of them the average cost of mining 1 Bitcoin. 

Given that 1 BTC has a market value of about $60,000, all the countries where the average cost of mining a Bitcoin is lower are places where one can mine profitably, while in others it is not worthwhile. 

The costs of Bitcoin mining by Country

One of the countries with the most affordable mining cost is Russia. 

Note that among the countries with the lowest costs, there are none that fall into the more industrialized ones, and generally, they are often countries where fossil fuels such as oil and natural gas are extracted. 

For example, in Libya, the average extraction cost for a single BTC is only $5,300, compared to $39,700 in Russia. 

Even in Nigeria, the costs are very low ($9,200), although the absolute lowest cost seems to be that of Iran, with only $1,300. 

This last fact is curious, because although Iran is a major oil producer, it is also one of those States that has suspended crypto mining, to prevent it from diverting energy from civilian uses.

Perhaps the problem in this case is precisely due to such a low extraction cost that there is a risk that the Iranians might prefer to use the oil to mine Bitcoin rather than for other reasons.

Among the top ten cheapest countries, in addition to those listed, there are also Ethiopia (less than $2,000), Sudan, Syria, and Cuba (less than $4,000), Angola and Kyrgyzstan ($8,600), and Bhutan ($9,900). 

It is noteworthy that many of these are oil-producing countries, while the case of Bhutan is more particular. In fact, in the small Asian country, it is the State that mines, having already accumulated 780 million dollars in BTC.

The division of costs for Bitcoin mining activities in America

Many of the cheapest countries are concentrated in Asia and Africa, while in the Americas there are only five countries where mining 1 BTC costs on average less than $50,000. 

It should be noted, however, that these are only estimates that use as a reference average cost of electricity the domestic one of homes, and not the industrial one. 

In fact, the USA, which is the single country in the world with the most hashrate, would have an average domestic extraction cost exceeding $100,000. This means that in the USA, it is generally not convenient to mine Bitcoin at home, while it becomes convenient if done industrially, particularly in those places where the miner can produce electricity on their own or take advantage of proximity to economical production sources. 

The case of the USA is emblematic also because the cost actually changes from area to area, so much so that it is, for example, much more convenient in some states like Texas, and much less convenient in others. 

The average extraction cost in Asia

The second largest single country in the world for hashrate should have returned to being China. 

According to this research, the average domestic mining cost of 1 BTC in China would be around $50,000, which makes it barely convenient. 

Even in China, there are large miners with much lower costs, thanks to the fact that they produce electricity themselves or take advantage of proximity to economical sources. 

Besides China, the other areas with low costs are the Middle East, as already highlighted by the most economical countries in the world, and Central Asia. For example, in Kazakhstan there are many miners, and there the average domestic cost is $32,400.

Malaysia, Laos, and Myanmar are also economical. 

Africa

In Africa, there are several countries with very low domestic electricity costs, but without much hashrate. 

In this case, it is necessary to add another reasoning. 

In theory, the countries with lower costs should be those where more low-cost energy is produced. 

However, consumption also matters a lot. Therefore, a country that produces a lot of electricity but consumes more actually has much higher costs than one where little is produced but even less is consumed. 

The fact is that in Africa probably not much electricity is produced, but very little is consumed, and it is probably for this reason that the costs are so low.

Furthermore, in nations like Libya, Nigeria, or Algeria, significant quantities of oil are extracted.

For example, in South Africa, one of the most advanced countries in Africa, the cost of domestic mining skyrockets to over $122,000 per Bitcoin. 

The landscape in Europe and Oceania

In Europe and Oceania, there are many countries where the average domestic cost of mining 1 BTC is higher. 

The single country with the highest cost overall turns out to be Ireland, with more than $320,000, followed by Belgium with $280,000. 

In the top ten, there are five other European countries (Great Britain, $271,000, Germany, $269,000, Denmark, $258,000, Switzerland, $236,000, and the Czech Republic, $228,000), and two Caribbean countries (Bahamas, $280,000 and Cayman Islands, $268,000). 

In Australia, however, they exceed 180,000$. 

In Eastern Europe, however, there are at least two countries (Ukraine and Belarus) with less than $50,000, as well as Turkey. 

The general picture is therefore one of enormous differences, mainly due to the locations of fossil fuel extraction and the general consumption of electricity.