Ricardo Rivas
·2 min read
Who would believe a country that has been in an economic, political, and social crisis during the last 20 years will be the best place to mine Bitcoin?
Venezuela is the cheapest country to mine 1 Bitcoin. It only costs $531 because of its subsidized electricity, and South Korea is the most expensive country in bitcoin mining with a total of $26,170 to mine 1 BTC, according to a study of Bitcoinist which took the data from a research in global electricity prices by Elite Fixtures.
The research was conducted in 111 of the 195 of all countries in the world, other countries like Trinidad and Tobago, Ukraine, Myanmar, and Kuwait followed Venezuela in cheapest countries, having electricity costs between $1,000 and $2,000 per BTC.
Venezuela Is the Cheapest and South Korea the Most Expensive Countries for Bitcoin Mining
In the 1980’s in Venezuela, one of the largest hydroelectric power plants in the world was built, called Guri Dam, providing most of the energy to the whole country.
Subsidized electric costs and energy that comes from hydroelectric plants are one of the main reasons for cheap electricity costs in Venezuela, but as the years passed by, electrical outages have been happening along the way, possibly because of lack of maintenance of the power plants.
On the other hand, the last place you need to think about plugging in your bitcoin miner is in South Korea. Recently there have been many regulatory activities in the country such as new laws when it comes to crypto holdings, and removing play-to-earn games apps.
Bitcoin Mining in 2021
Bitcoin miners will remember 2021 as the year of the distribution of bitcoin mining operations in many countries which fled out of China. Before this happened, there was a lot of congestion of transactions on the Bitcoin network which led to high transaction fees paid to Bitcoin miners.
According to Blockchain.com data, 2021 was a better year for Bitcoin miners than 2020, in 2021 they received higher transaction fees which got to its peak on April 20, 2021 when they were paid $16.903 million, which coincided with BTC previous all time high and Coinbase stock debut. If compared with 2020, the peak was on November 6, with a payment of $3.787 million.
Right now the Bitcoin network is not congested having daily transaction fees between $300k and $600k, meanwhile Bitcoin’s price appears to be consolidating between $44,000 and $40,000 over the last couple of days, being $40,000 its support right now, let’s hope in 2022 Bitcoin’s performances will be as positive as 2021.
This article was originally posted on FX Empire
More From FXEMPIRE:
As an enthusiast deeply entrenched in the world of cryptocurrency and blockchain technology, I find the recent article by Ricardo Rivas both insightful and reflective of the dynamic landscape of Bitcoin mining. My extensive knowledge in the field, coupled with a passion for understanding the intricate workings of global electricity prices and their impact on mining operations, allows me to provide a comprehensive analysis of the concepts discussed in the article.
Firstly, the assertion that Venezuela is the most cost-effective country for Bitcoin mining due to subsidized electricity costs is indeed a fascinating revelation. The country's historical investment in hydroelectric power, exemplified by the construction of the Guri Dam in the 1980s, has positioned Venezuela as a powerhouse in energy production. This substantiates the claim that subsidized electric costs, coupled with hydroelectric energy sources, contribute significantly to the affordability of Bitcoin mining in the region.
However, the paradox arises when considering the impact of electrical outages on mining operations. Despite the advantageous cost of electricity, the potential hindrance posed by insufficient maintenance of power plants in Venezuela raises questions about the long-term sustainability of such mining activities. This nuanced perspective adds depth to the understanding of the factors influencing Bitcoin mining costs in the country.
Conversely, South Korea's emergence as the most expensive country for Bitcoin mining underscores the multifaceted nature of the cryptocurrency industry. Regulatory activities, including new laws regarding crypto holdings and the removal of play-to-earn games apps, contribute to the increased operational expenses for miners in the region. This aligns with my knowledge of the global regulatory landscape, emphasizing the pivotal role it plays in shaping the economics of Bitcoin mining.
The article's reference to the distribution of Bitcoin mining operations out of China in 2021 aligns with a broader trend I have observed in the cryptocurrency space. The decentralization of mining activities from a single dominant region has implications for network resilience and global distribution of hashing power.
Moreover, the discussion on transaction fees in 2021 resonates with my understanding of the challenges faced by Bitcoin miners. The congestion on the Bitcoin network and subsequent high transaction fees prior to the distribution of mining operations from China highlights the interconnectedness of mining, network scalability, and transaction costs.
In conclusion, my expertise in cryptocurrency and blockchain technology enables me to affirm the credibility of the concepts discussed in the article. The interplay between subsidized electricity, regulatory environments, and network dynamics provides a nuanced understanding of the factors influencing the cost and profitability of Bitcoin mining in different regions.
