Which are the countries where most cryptocurrencies are mined?
The high amount of energy used for Bitcoin mining means it has to be conducted in a country or state which has access to cheap energy.
Cryptocurrencies continue to be a promising investment for many. They need a lot of energy to be stored and mined, meaning they can only really be mined in nations or areas with a low electricity cost. Though this is getting harder to find as of the rising price of energy, there remains various places which are favourites fo prospective crypto-miners.
According to the University of Cambridge Bitcoin Electricity Consumption Index, the nations which mine the most crypto are:
- United States, 35.40% of hashrate share
- Kazakhstan, 18.1%
- Russia, 11.2%
- Canada, 9.6%
- Ireland, 4.7%
Bear in mind that the most recently published data is until August 2021. This data is out of date, as one of the nations listed has completely rowed back on its commitment to cryptocurrency in the months since this information was released.
What are the problems with mining so much crypto?
Clearly, vast amounts of energy is needed to keep these mines operating. What happens when access to this necesssary resource is throttled?
This became a problem in Kazakhstan, a nation in central Asia. Until August 2021 it was the second largest mining spot in the world. However, an energy crisis at the start of 2022 could terminally end the venture.
“We have not been able to operate properly since October 13 2021, when the first power cuts hit us,” Aibolat Balgozhin, BTC KZ’s chief power engineer told Rest of World. “And we are kept in the dark as to when we would be able to work at full capacity or what solutions the power grid operator, KEGOC, is going to come up with.”
The energy crisis means the Kazakh government’s priority is no longer to court crypto investors leaving China. The government now taxes energy use by cryptocurrency mines and mining is no longer feasible.
The other, more serious, issue with needing vast amounts of energy is the effect on the environment. The Bitcoin Energy Consumption Index provided by Digiconomist estimates as of April 2022 a single Bitcoin transaction takes almost 2,189 kWh to complete, or the equivalent of just over 75 days of power for the average US household.
Keeping with the Kazakh example, much of the power generated for mining was done through coal burning. Generating all this energy often comes through non-renewables, a serious problem as the market continues to grow.