How Much Electricity is Needed to Mine 1 Bitcoin?
As a solo miner, an average of 266,000 kilowatt-hours (kWh) of electricity is required to mine a single Bitcoin ($BTC ). This process would take approximately seven years to complete, demanding a monthly electricity consumption of about 143 kWh. To put this into perspective, this monthly electricity consumption is roughly one-sixth of what a typical household in the United States consumed in 2021.
Several critical factors demand close attention in the profitability of Bitcoin mining for solo miners. Among these, the price of electricity, the mining equipment hash rate and the network’s mining difficulty are paramount. While some miners opt to participate in mining pools to increase their chances of success, this study focuses on an extensive analysis of household electricity costs across the globe, providing insights into the distribution of these costs across different regions, and present valuable prospects for solo miners operating within a decentralized network.
Bitcoin Mining Evolution’s Impact on Electricity Usage
In the early days of Bitcoin’s inception in 2009, the mining process was relatively simple and required minimal electricity, utilizing desktop computers. However, as #Bitcoin gained traction and global interest surged, the mining process evolved into a more intricate operation with the increasing utilization of specialized hardware, particularly application-specific integrated circuits (ASICs), becoming the standard. Unfortunately, these specialized tools come at the cost of significantly higher electricity usage, distancing mining from its earlier accessible nature.
How Much Does it Cost to Mine 1 Bitcoin? (Household Electricity Costs)
The average household electricity cost to mine 1 Bitcoin is $46,291.24, which is 35% higher than the average daily price of 1 #BTC in July 2023 ($30,090.08). The regional differences in household electricity costs are significant, with Europe standing out with the highest average cost of household electricity, estimated at $85,767.84.
In contrast, the Asian region boasts the lowest average cost for solo miners at $20,635.62 when mining 1 Bitcoin. This region stands as the sole territory where the average household electricity costs make mining profitable for a solo miner. Still, the disparity between Lebanon’s low electricity cost of $266.20 and Japan’s high cost of $64,111.02 accentuates the disparate nature of electricity expenses within the region.
Solo Bitcoin Mining is Most Profitable in Asia
Globally, only 65 countries present profitability for solo mining of a single Bitcoin based solely on household electricity costs. Europe accounts for five of these countries, while the Americas, primarily in South America and the Caribbean, offer opportunities in eight nations. Africa emerges as a noteworthy region with 18 countries, and Asia stands out as the most significant contributor hosting 34 countries that offer the potential for profitable solo mining operations.
Even with Crypto Bans, these Countries Provide Cheap Electricity for Bitcoin Miners
Despite the opportunities, it is crucial to acknowledge that as of November 2021, a total of nine countries have completely banned the mining, trading and use of cryptocurrency completely. These nations primarily lie in Africa and Asia with five: Bangladesh, China, Iraq, Nepal, and Qatar located in Asia and four: Algeria, Egypt, Morocco and Tunisia located in Africa. An additional 42 countries have implemented implicit restrictions regulating the use of cryptocurrencies without a complete ban.
Notably, all the completely banned countries except Morocco have the potential for profitable mining of 1 BTC by a solo miner.
The Most Profitable Countries to Mine 1 BTC
The top 10 countries where Bitcoin mining is most profitable due to low household electricity costs are predominantly in Asia and Africa:
The Iraqi central bank banned the use of cryptocurrency back in 2017. Otherwise, Iraq would have made the list as the ninth cheapest country to mine Bitcoin.
Although low electricity costs in some countries promise profitability, constant Bitcoin mining may overload the grid and lead to blackouts. This has been the case in Iran, a country that legalized Bitcoin mining in 2019 but has since prohibited legal operations on several occasions. This cycle of prohibition is mainly due to power shortages during the summer and winter months when electricity consumption usually spikes, despite the low mining electricity cost of $532.04. Similarly, in Iceland, a scarcity of power led to the country's national power company, Landsvirkjun, turning away new Bitcoin miners in 2021.
The Most Unprofitable Countries to Mine 1 BTC
It is unprofitable to mine Bitcoin in 82 countries, of which these are the top 10 most expensive countries with highest household electricity costs to mine 1 BTC:
he most expensive electricity costs are in Europe, with nine of the 10 countries on the list from the region. The increase in household electricity prices within the European region has been attributed to various factors, including the global surge in wholesale electricity prices, which emerged amid the COVID-19 pandemic and growing international demand. Additionally, the 2022 heatwaves and the Russian invasion of Ukraine, which led to the suspension of gas deliveries to some EU member states, further compounded the situation, resulting in record-high electricity prices rendering Bitcoin mining largely unprofitable within the region.
How Many Units of Electricity are Consumed in an Hour of Mining Bitcoin?
The amount of units used in mining 1 BTC in an hour is not as disparate as one might think when compared to other household appliances. The table below drives home the narrative that Bitcoin is not as severe as portrayed by mainstream media, as reviewed in our article that reframes the narrative on Bitcoin's environmental impact.
Methodology
This study examines the cost of mining one bitcoin (BTC) across 147 countries, in USD per kilowatts hour (USD/kWh).
The electricity required to mine a single Bitcoin was derived by considering eight different mining models with varying hash rate values, and the average time it took to mine a single Bitcoin per model with a mining difficulty of 53,911,173,001,055.00. Bitcoin’s mining difficulty is precisely adjusted after 2,016 blocks have been mined, and this adjustment cycle is dependent on the number of participants active within the mining network and their collective hash power, as observed by CoinWarz Bitcoin calculator.
The eight mining models with varying hashrate values and respective power consumption as follows:
The cost of electricity for 147 countries in the format of USD per kWh was obtained from globalpetrolprices.com, and is accurate as of December 2022. This data was then processed and organized by country, region and sub-region.
Finally, the average electricity consumption was multiplied by each country’s electricity cost to calculate the cost of mining one Bitcoin in each country.
