Did you know that cryptocurrencies such as Bitcoin (BTC), just like gold and other precious metals, are mined too? But instead of digging tunnels or shafts into the ground to reach the deeply buried metals, miners dig up Bitcoin from its complex digital “cave”. This process, called cryptocurrency mining, is an excellent option if you’re thinking of ways to acquire Bitcoin directly.
What’s more interesting about mining Bitcoin and other cryptos is that it can be highly profitable. However, the overhead cost of its operations can also be extremely high, which is why not every country is a fan of the idea. On the flip side, there are some places where you can find better opportunities for your crypto mining adventure. To help you decide where to jumpstart your mining activities, we’ve prepared a list of 10 mining-friendly countries just for you.
But before we dive deeper into that, let’s take a look at some of the factors that make a country an excellent spot for mining.
Key drivers for profitable crypto mining operations
There are lots of factors to be considered if you want to try your hand at crypto mining, but here are some of the most common ones you need to be familiar with:
Advanced and specialized mining machines
As we mentioned earlier, crypto miners dig BTC’s digital cave to collect fractions of this digital coin. If gold miners use hard rock equipment to dig up nuggets of precious metals, Bitcoin miners assemble their very own mining machines that consist of expensive specialized software and powerful mining rigs.
Crypto miners use this equipment to solve highly complex mathematical problems that are impossible to answer through pen-and-paper and mental approaches. After finding the solution, BTC miners will be rewarded with a newly minted coin and amounts from the transaction fee—but that’s a story for another time.
Fast and reliable Internet connection
Besides the costly and powerful equipment, you’ll also need a high-speed and stable Internet connection to run the mining operations. Of course, this service also comes with fees, which vary depending on which part of the world you’re in.
Cheaper electricity costs
Crypto mining operations consume high electricity levels, which is one reason why some countries don’t allow such activities within their borders. So if you’re planning to mine crypto, look for a country with a cheaper commercial electricity rate.
Suitable climate conditions
Bitcoin mining machines operate almost non-stop, so a place with cooler weather is suitable to keep their temperature down. A cooler climate condition keeps these energy-hungry machines from overheating and minimizes the cost of electricity consumed by cooling systems.
Country’s economic situation
It’s also essential to know how a country is doing economically. This plays a significant role in determining how cheap or expensive crypto mining operations will be. Aside from the costly equipment, you’ll also need highly-skilled individuals to operate and monitor them. Their wages will be calculated based on the country’s cost of living. Additionally, you’ll need a place to set up the mining machines, so real estate and construction expenses will add to the overhead costs.
Government’s stance on crypto-related activities
Because of the expensive resources needed to run cryptocurrency mining, its effects on the environment, and a country’s power consumption rate, some jurisdictions remain skeptical about digital coins. That’s why it’s essential to know if the country you’re eyeing sees cryptocurrencies in a positive light.
Ideal spots to mine cryptocurrencies
Different countries have varying views about digital currencies, especially when it comes to the process of generating them. However, certain jurisdictions can potentially host crypto mining activities and provide you with great opportunities. Here are a few of them in no particular order.
This cryptocurrency and blockchain technology-friendly country ranks 109th in the October 2020 Speedtest Global Index released by Ookla, with a fixed broadband download speed of 26.80 Megabits per second (Mbps). This rate is neither too fast nor slow for a small household. You can stream your favorite shows on Netflix and videos on Youtube at full HD while playing online games without lag. Georgia’s electricity price is 0.056 USD per kilowatt-hour (kWh) and its annual temperature is considerably enough to cool the mining machines.
Estonia ranks 50th in the global ranking with a download speed of up to 74.73 Mbps. As of March 2020, its electricity price is 0.174 USD per kWh. It’s also home to hundreds of blockchain and crypto companies since the country regards cryptos as “value represented in digital form.”
Canada stands in an excellent position worldwide in terms of Internet speed. It ranks 17th with a speedy connection rate of 149.35 Mbps. Its average electricity price is 0.174 USD per kWh, according to the data from energyhub.org. In 2018, cryptocurrency mining boomed in Canada because of its relatively cheap electricity, cold weather, and light regulations. The use of digital currencies is allowed, but they aren’t considered legal tender in the country.
Internet speed in Norway is also impressive. It follows Canada on rank 18 with a fast connection speed of 146.53 Mbps. As for the electricity costs and location, Norway relies heavily on hydropower. It also has cold, snowy winters and mild summers, making it a suitable place to cool the miners’ equipment.
In terms of regulation, the Central Bank of Norway doesn’t recognize cryptos, but it also doesn’t prohibit people from owning and investing in them—for tax purposes, at least. On the flip side, the Norwegian Financial Supervisory Authority (FSA) enforced money laundering regulations on the local providers of virtual currency exchange and storage devices.
Kuwait’s Internet speed and reliability are worth noting as well. It ranks 34th globally with a download speed of up to 110.33 Mbps and its average electricity price is 0.029 USD per kWh—including the cost of power, distribution, and taxes. This country seems to have the lowest electricity cost, making it a good option for profitable BTC mining. However, the country’s regulation is a bit tricky.
The Library of Congress stated that the country’s Ministry of Finance does not recognize cryptocurrencies for official commercial transactions, and the Central Bank of Kuwait prohibits crypto trading. But in 2018, CBK confirmed the issuance of an e-currency that the government will also monitor. If you’re planning to do some BTC digging in this foreign land, better stay updated on the government’s position on it.
In June 2020, a report from the UN Environment Programme (UNEP) stated that almost 100% of Iceland’s electricity comes from renewable sources and the country is embracing geothermal power. This shouldn’t be surprising because Iceland is home to over 200 volcanoes and numerous hot springs, providing tons of underground water to be converted for power generation. However, its rank in last month’s Speedtest Global Index is undefined.
This country has the fastest Internet speed among the countries on the list. Globally, it ranks 4th with a towering download rate of 186.40 Mbps, though its electricity price is priced a little higher at 0.228 USD per kWh. Switzerland has relaxed regulations on cryptocurrencies and classifies them as assets or properties, which is why it’s known as one of the friendliest nations for crypto miners.
Finland also has an impressive Internet speed rate of 108.84 Mbps. Worldwide, it ranked 35th, following Kuwait. The price of electricity in the country is 0.183 USD per kWh and its temperature is one of the best in the world for cooling the powerful crypto mining equipment.
The next country with the fastest Internet speed on our list is Sweden, ranking 14th globally with a download speed of 158.73 Mbps. In January of this year, thelocal.se reported that Sweden’s electricity price was pushed down because of the mild winter, combined with lengthy precipitation and relatively windy weather. However, this lower price of electricity varies depending on which area you live in. This year, the average household electricity price in Sweden is 0.179 USD per kWh.
Last but not least, Latvia is also among the ideal destinations for crypto mining in terms of Internet speed. It ranks 31st worldwide with a download speed of 115.22 Mbps. In the first half of this year, Latvia’s average household electricity cost was 14.2 euro cents per kWh. This was considered the country’s lowest price since the second half of 2014.
Setting foot on crypto’s digital cave
We’ve learned that there are tons of things to consider if you’re planning to try your hand at cryptocurrency mining. Explore the information we’ve covered and check if mining makes financial sense for your crypto needs. You can ask yourself questions like, “Which method is more effective for me? Buying Bitcoin or mining it?”
Finding the right balance between the factors we’ve listed earlier can be challenging, but just like reaching any goal, crypto mining requires lots of patience and perseverance. It’s one of the earliest and primary approaches to make profits in the crypto sphere, so be sure to prepare the needed resources and unleash your inner crypto genius to reap satisfying rewards!
*The content of this article is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice.