Where should cryptocurrency miners go in an ever-changing landscape?

Which countries are the next hotspots for miners, and where can Ether and Bitcoin be mined effectively – and financially — in 2022? One of the major issues in the crypto world in 2021 will be China’s aggressive mining policy, which resulted in a total ban on such activity in September.

While mining as a financial activity has not vanished and is unlikely to vanish, Chinese cryptocurrency miners have forced to hunt for a new location to set up company. Many of them relocated to the United States, the world’s new mining capital, while some went to Scandinavia and others to neighbouring Kazakhstan, which has inexpensive power.

Mining operations cannot remain hidden forever, and governments throughout the globe have started to express worries about power capacity and disruptions.

Erik Thedéen, vice-chair of the European Securities and Markets Authority and director general of the Swedish Financial Supervisory Authority, has urged for a European ban on mining proof-of-work cryptocurrencies such as Bitcoin (BTC).

As countries throughout the globe continue to clamp down on mining-related activity, the question becomes, “Where is it still economical, and legally advantageous, to mine cryptocurrency?”

North America

It’s no secret that the United States is the leading nation for cryptocurrency mining, notably in Texas, the Lone Star State. Following the Chinese flight, crypto miners and billions of dollars of wealth poured into the southern state. This is due in great part to state legislation, with Governor Greg Abbott aggressively supporting the Bitcoin business.

In an interview, Philip Salter, CEO of crypto mining startup Genesis Digital Assets, explained why the state became a popular place for miners:

“The most prominent location for miners worldwide may be Texas right now. Its huge amounts of wind and solar power are causing a surplus of affordable energy. Privately owned power grids ensure a fast path for new projects, without being hindered by slow bureaucracy. The benefits of Texas aren’t so new though. Miners started building there already years ago, even if not as aggressively as now.”

Texas has its own electrical infrastructure issues, with severe blackouts impacting most of the state in 2021 due to unseasonable winter storms. However, miners in the area have been very understanding about power use, and major corporations have even switched off equipment on a regular basis to prioritise residential customers and important infrastructure.

Canada, America’s northern neighbour, has likewise been aggressively courting mining corporations. Alberta officials recently encouraged bitcoin miners to the state, boasting its low energy rates due to an abundance of local natural gas.

Latin America

Latin American nations have made significant efforts to recruit miners, with El Salvador in particular demonstrating a friendly stance toward mining. The nation was the world’s first to recognise Bitcoin as legal cash. The Salvadoran government has not shied away from direct investment in Bitcoin, with plans to develop a metropolis devoted to the world’s most popular cryptocurrency, with power for mining BTC purportedly coming from volcano-fired geothermal reactors.

Because of its cheap power rates, Costa Rica is likewise becoming more mining-friendly. A hydroelectric power facility that was decommissioned during the COVID-19 epidemic has been reactivated thanks to mining.

Large crypto firms have also started to establish operations in Costa Rica. Chia Network, a blockchain network founded by BitTorrent’s Bram Cohen, has committed to give technological support for Costa Rica’s national climate change projects.

Argentina was a favourite destination for miners until the government recently decided to reduce subsidies and boost taxes on mining activity. So far, these financial policy modifications for mining have been restricted to Tierra del Fuego, a region noted for its frigid environment. Nonetheless, Argentina remains a suitable location for mining farms even when power prices rise, because to the energy crises in rival countries like as Europe.

Mining is still possible in Europe

Crypto mining activities in Europe remain relatively restricted, as rising power costs in the midst of the energy crisis, as well as policymakers’ generally dubious stance toward cryptocurrencies, make crypto enterprises think twice before moving to the continent.

Indeed, Iceland, a Nordic country, was once a hotbed for Bitcoin mining, thanks to its subarctic volcanic topography, which provided cheap power and minimal cooling costs for mining farms.

However, Landsvirkjun, the country’s national electricity utility, reduced the amount of power it would give to energy-intensive businesses such as Bitcoin mining and aluminium smelting late last year, citing capacity problems.

Despite the continent’s restrictions, there are a few places in Europe where miners have opted to set up shop, and location and climate are crucial factors in recruiting company.

Georgia, situated in the Caucasus area, has a vast number of hydroelectric power plants established during the country’s tenure as a Soviet republic, which, along with the country’s comparatively small population, has supplied a considerable supply of inexpensive energy for miners.

Major cryptocurrency mining businesses have already established themselves in the nation. Bitfury, a Dutch mining business, constructed its first data centre in the eastern Georgian city of Gori in 2014, with a power use of 20 megawatts.

The success of Bitfury piqued the interest of many Georgians, who started to actively seek out strong video cards and set up their own tiny crypto mining farms. According to the World Bank, 5% of Georgians were involved in cryptocurrency mining in 2018.

It should also be highlighted that Russia remains a crypto mining hotspot due to cheap energy prices and a frigid environment.

Andrei Loboda, public relations director of BitRiver, Russia’s leading cryptocurrency mining colocation services provider, provided some particular places where miners would be able to work if the Russian government becomes more supportive of cryptocurrencies:

“According to BitRiver, today, about 300,000 individuals are engaged in mining Bitcoin alone in the Russian Federation. Our company performs energy-intensive, high-speed computing in data centers in a number of the Russian Federation regions, including the Irkutsk Region and the Krasnoyarsk Territory. The green and digital technologies that we implement in our work as part of the digital energy transition have already given an additional impetus to the development of the regions.”

Is mining worth it?

Geography is an important consideration for miners, whether for power and cooling costs or regulatory considerations. However, certain expenditures, including as gear, will be carried with miners wherever they travel.

With demand for mining equipment on the increase and a recent market collapse after the bull run of 2021, when is mining worth it with all the hardware costs?

Since 2016, 2021 has been the most lucrative year for mining Ether (ETH) using graphics processing units. This is hardly unexpected given that the price of Ether more than doubled last year. However, the biggest difficulty for miners is the cost of power and equipment, both of which are rising significantly.

Nonetheless, although Ether mining remains profitable, the payback time for equipment purchases is increasing, thanks in part to the London hard fork in August 2021, which decreased the compensation for each block mined from 8–20 ETH to 2 ETH. Another disadvantage for miners will be the much-anticipated switch of the Ethereum blockchain to proof-of-stake consensus, which would require them to start mining altcoins or recertify as network stakers.

Despite a significant drop in BTC’s price in January, which reached a monthly low of about $34,300, the Bitcoin network’s mining difficulty just reached an all-time high.

It is remarkable that, in light of this, the cost of ASICs has not decreased. At the same time, this year’s ASIC payout term is little more over 1,000 days, or almost three years. Not everyone can afford to bear such costs for such an extended period of time.

There are several shifting elements that miners must consider, but one thing is certain: cryptocurrency mining is a flexible, adaptable sector, and corporations have shown that they are prepared to migrate to more advantageous sites if their present one proves less than perfect.


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