Mining a single bitcoin — the largest cryptocurrency by market cap — cost a whopping $26,170 USD in South Korea, whereas it only costs $531 in Venezuela. That’s according to a recent survey from lighting and furniture company Elite Fixtures.
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A report on the survey by CNBC said the wide margins indicate mining bitcoin can still be profitable if done at the right location. Over the past year, cryptocurrencies have been the most impressive asset class (by percentage gain) with bitcoin spearheading as the most valuable cryptocurrency by market cap, compared to traditional investments.
Where mining bitcoin was something once done by hobbyists on home-built rigs, these days it’s big business. Manufacturing and obtaining the latest hardware ahead of others is fiercely competitive, and the mining itself is done in massive factory farms in remote (usually cold) locations.
Venezuela the ‘Best’ Destination to Mine Bitcoins
South Korea is a key trading player in the crypto space, however, when it comes to mining bitcoins themselves, South Korea is nowhere close to the leading nation.
Mining demands a lot of electricity and produces massive amounts of excess heat, as these rigs consist of high-performance computer chips built only to solve Bitcoin-specific, complex mathematical problems. In return for helping secure the network, miners are rewarded with new bitcoin tokens and the fees paid by traders.
Recently, Elite Fixtures surveyed 115 countries to discover the most and least profitable countries to mine. The survey was based on electricity costs to mine a single bitcoin using the top three most popular crypto mining rigs.
Somewhat surprisingly, Venezuela topped the chart as the cheapest country to mine bitcoin. That might not make it the “best”, though — the government takes a dim view of any attempt to subvert its socialist economic policies, and bitcoin miners in the country have been harassed, arrested and even kidnapped over their occupation.
At current Bitcoin price of $ 9,970, mining a single coin in Venezuela can earn a profit of $ 9,439 — whereas mining a single coin in South Korea will incur a loss of $16,200. Venezuela’s cheap and subsided electricity is the reason for such a wide profit margin in mining the largest cryptocurrency.
At the time when Venezuela is struggling economically due to strict sanctions from the United States, mining bitcoin can be a savior for citizens. Moreover, Venezuelan President Nicolas Maduro’s government has reportedly already started their work on the country’s own cryptocurrency called the “petro” — backed by oil, gas, gold and diamond reserves.
The government hopes to overcome inflation caused in part by the financial blockade the country is undergoing.
Mining Bitcoin Is Still Profitable in the US
Trinidad and Tobago holds the second spot for being the cheapest country to mine bitcoin. It cost $1,190 to mine a single coin in the Caribbean nation, therefore miners can make a profit of $8,780 at the current price of bitcoin of $ 9,970.
Trinidad and Tobago benefits from the oil and gas reserves that the country holds, permitting it to subsidize electricity.
According to Elite Fixtures’ survey, the United States is the 40th cheapest county to mine bitcoin, where it would cost $4,758 to mine a single coin. If bitcoin holds its current price or rises, that’s still quite profitable.
These margins are based on current price of both electricity and bitcoin. Electricity charges may not fluctuate same as bitcoin itself, yet none of the calculations are static. The market is volatile, with big dips and occasional “to-the-moon” spikes in BTC value.
Will countries that have low electricity charges turn to bitcoin mining as a mainstream business? Let us know your thoughts in comments.
Images via Pixabay