The profitability of Bitcoin mining hinges significantly on regional electricity costs. With European countries topping the list of the most expensive places to mine and nations like Lebanon offering surprisingly cheap alternatives, a recent study delves into the dynamics of these disparities. Is it Profitable to Mine Bitcoin in Lebanon?
What is Bitcoin Mining?
Bitcoin mining is the process through which new bitcoins are introduced into circulation and is essential to the maintenance and development of the blockchain ledger. This computational process involves solving complex mathematical problems, which in return generates new bitcoins. However, the profitability of mining largely depends on factors like electricity costs.
Is Bitcoin Mining Profitable?
Recent data reveals that the profitability of Bitcoin mining is significantly influenced by household electricity costs across different regions. A report published by CoinGecko on Aug. 17 noted an immense global disparity in these costs for individual Bitcoin miners. In particular, mining one Bitcoin in Italy could set someone back a staggering $208,560. In stark contrast, mining the same in Lebanon is approximately 783 times cheaper.
Diving deeper into the findings, the report highlighted that only 65 countries yield profits for independent Bitcoin miners based exclusively on domestic electricity charges. Asia dominates this list with 34 countries, while Europe has a mere five that make the cut.
“The average household electricity cost to produce a single Bitcoin stands at $46,291, marking it 35% higher than the Bitcoin’s average price in July 2023, which was $30,090.”
Italy has the dubious honor of being the most expensive country for Bitcoin mining, with costs soaring to $208,560 per coin. Astonishingly, this implies that the expense of mining one Bitcoin in Italy matches the value of nearly eight Bitcoins. Austria and Belgium closely follow, incurring mining costs of $184,352 and $172,382, respectively.
Is Bitcoin Mining Profitable in Lebanon?
Lebanon paints a contrasting picture. The nation’s household electricity tariffs allow individual miners to craft a Bitcoin for a mere $266, making it about 783 times more affordable than Italy. Iran is next in line, where producing a Bitcoin costs $532. However, it’s crucial to note that although Iran legitimized Bitcoin mining in 2019, it has intermittently imposed bans due to energy grid concerns, especially during winters.
Furthermore, recent news highlighted Iran’s confiscation of approximately 150,000 crypto mining devices by the country’s Organization for Collection and Sale of State-Owned Property.
Mining Opportunities and Challenges
Binance CEO, Changpeng “CZ” Zhao, took to X (previously known as Twitter) on Aug. 19, sharing this report’s data. He probed his 8.6 million followers about the seemingly lucrative mining prospects in low electricity cost countries. While CZ expressed skepticism and believed there might be other elements at play, he felt the topic warranted further exploration.
CZ’s post received feedback from an X user, emphasizing that many of these nations grapple with electricity shortages, often shutting down significant industries during peak times or summers.
Source Credit: Information for this article was sourced from CoinTelegraph.