Do you want to become a large-scale Bitcoin miner ? If you want to scale up your cryptocurrency business, then simply setting up your computer for mining Bitcoin , will not be enough. There are a few other factors that you must consider. There are a lot of people in the market, trying to do the same thing and thus, you need to have complete knowledge about how you can grow and scale your mining business .
Most people think that because mining is a completely digital process , you can do it from anywhere in the world. You can indeed mine Bitcoin from anywhere in the world, but after doing some research you will understand that some factors play a very important role in the process of choosing the perfect Bitcoin mining location.
The first cryptocurrency, Bitcoin was created only a decade ago . Thus, this market is relatively still very new. This makes it more difficult for people. Unlike other investment options, you will still not find a handbook on what to do and what not to do regarding cryptocurrencies. So, in this article, I have put in all my experiences and provided you with solutions to the problems that may arise.
So, if you want to get into Bitcoin mining, but do not know in which location you must set it up, this article is for you. In this article, I will be discussing everything that you need to know about the factors that play a key role in determining Bitcoin mining location.
What is Bitcoin Mining?
Let us start with understanding what Bitcoin mining really is. The process of the creation of new Bitcoins is known as Bitcoin mining. It is also through the process of mining that the network confirms new transactions and also, develops and maintains the blockchain ledger . And how does the mining process take place? It is through the use of advanced hardware that can solve cryptographic mathematical puzzles.
The Bitcoin mining process is not just very costly, but also sporadically rewarding. Only investors who are really interested in the cryptocurrency market get into Bitcoin mining as miners get rewarded that they can use with their crypto tokens.
How Many Bitcoins Will Be Mined in 2022?
So, if you set up your mining farm now, how many Bitcoins could you possibly mine in 2022? Well, statistical data shows that about 900 Bitcoins are being mined every day all over the world . And if this continues consistently, there would be about 328,500 bitcoins by the end of this year.
Also, in Bitcoin mining, more people do not mean a huge number of Bitcoin will be mined. But increased miners do mean increased competition. That does not mean you cannot earn a huge amount of profit from Bitcoin mining in 2022. With the right choice of location and proper research, you can still gain a huge profit from this market.
So if you want to become a miner, then here are the factors you should consider while choosing a Bitcoin mining location –
Factor 1: Electricity rates of the location for Bitcoin mining
The first and foremost factor that plays a great role in determining what location you should choose to set up your mining hardware is undoubtedly the electricity rates of the area . Crypto mining requires a constant supply of electricity, which means your hardware must be connected to the electricity all the time so that it can solve cryptographic mathematical puzzles.
The electricity rates of an area play an important role in determining the cost of a mining operation. So, you must know which part of the country has the cheapest electricity rates and also a good knowledge about what modes of electricity options are available there.
Statistical data shows that the process of Bitcoin mining consumes about 110 terawatt-hours every year which is also equal to the amount of electrical energy a small country consumes in a year. A normal ASIC miner , as per research, uses about 3000 watts of energy which is again similar to running a dryer, AC unit, or even a space heater.
Also, these Bitcoin mining farms are running all the time, be it day or night, and thus, consuming a lot of electricity. The cost can sometimes go out of hand as well. So, do not set up a mining farm in a place where mining would not be profitable for you due to the huge electricity cost that you would have to bear.
Factor 2: Sources of Green Energy for Bitcoin mining
There are a lot of places in the United States where you can find cheap electricity rates. But will take be sustainable energy? Well, you will obviously not find green energy in all parts of the world, but with the correct research, you must set up your mining farm at a location where green energy like – solar, wind, hydropower, etc will be available. Such sources of energy are much more sustainable than gas or coal.
According to a report published in the year 2019, ” 56% of all newly commissioned utility-scale renewable power generation capacity provided electricity at a lower cost than the cheapest new fossil fuel-fired option”
Even though sustainable energy is very cheap, most of the miners have been using unsustainable energy. With time, more people are getting interested in this market and trying to set up their own mining farms, and thus, it is becoming very important that people become aware of the amount of energy being used every year.
The billionaire, Elon Musk, after realizing the amount of energy needed for crypto mining, brought it to the forefront with his tweets. But, it would be wrong to say that all the miners are using fossil fuels to create Bitcoin.
A study conducted by ARK Invest and Cambridge Center for Alternative Finance shows that around 76% of the miners are using a sustainable source of energy for their mining process.
In fact, the whole industry is trying to move towards a more sustainable environment. So, if you are planning to set you your mining farm, make sure you consider the factor of sustainable energy as well.
Factor 3: Regions Best for Mining Bitcoin
Another important factor that you must consider before setting up your mining farm in any place of the world is: Is the location mining-friendly? Will the government let you mine cryptocurrencies here without creating any issues overnight? What is the political attitude in the location you are planning to set up your farm?
Make sure that the location you are choosing is not going to shut down their operation anytime soon. For example, the Chinese government in Sichuan recently banned all kinds of mining activities in the country, and thus, all the cryptocurrency miners either had to leave the country and move somewhere else to set up their mining farms or had to shut down their business completely .
Not just China, but also Iran has completely shut down mining operations in their country due to the recent power outages. So, it is best that you build your mining farm in a location that will not force you to shut your mining farm down suddenly.
While doing your research, you will also be able to understand which country is against the mining process and which country is encouraging miners. The Nordic countries have a huge source of green energy and thus, the Bitcoin miners are looking forward to those countries.
Other than that, Canada is also encouraging miners to set up farms in their country and labeled crypto mining as an “essential operation” during the Covid-19 pandemic as well. Thus, you will find a lot of Chinese miners flocking to the United States and Canada to set up their crypto mining farms.
Factor 4: Look for Local Talents in Bitcoin
The cryptocurrency market is a relatively very new form of investment. People have been investing in the stock market and mutual funds for a few decades now, but the cryptocurrency market is very new. The first cryptocurrency, Bitcoin was only created in 2009. Thus, unlike other investments that have a book of do’s and don’t’s, unfortunately, this market does not have one.
That means, there are not a lot of experienced people out there in the market. Nobody can tell you what you should do and how you should handle things. So, while setting up mining farms, make sure that the location that you are choosing has a lot of talents that have been working for industries with similar functions.
When you hire talents like that, you can transfer their skills for your own profit. For example, as I have already mentioned earlier, a lot of people choose Nordic countries like Sweden, where there is not just great availability of green sustainable energy, but also a lot of similar firms like Google, Facebook, and other such companies have data centers.
Thus, miners make great use of it and hire some of these talents to work at their crypto mining farms. With the right research, you will not find it difficult to find some locations where there are other data centers near your mining farms. This will undoubtedly help you find talents more easily.
Can Bitcoin Mining Be Sustainable?
A topic that must be definitely discussed while considering the factors of Bitcoin mining location is the factor of sustainable mining . I have discussed this briefly earlier as well. So the real question is, can power-hungry cryptocurrencies like bitcoin ever be mined sustainably?
Well, the blockchain network of cryptocurrency works by consuming a lot of energy. That is how this technology works. The process of Bitcoin mining includes solving complex cryptographic mathematical puzzles, also known as “proof of work”. This process is responsible for making decentralized cryptocurrencies.
But this process consumes a lot of energy as all the miners are competing with one another to solve the puzzle first and create Bitcoin for themselves. That is exactly why most of the miners are now moving towards sustainable renewable power sources.
But is that enough? Well a lot of people, including the famous economist and Bitcoin expert, Alex de Vries, think that using renewable energy on some computing operations is completely unnecessary. Such people are of the opinion that renewable energy must be used in other sectors that provides better job options and brings in development in the economy.
On the other hand, research carried out by BMC (Bitcoin Mining Council) showed that 32% of the global Bitcoin mimer are using electricity with 67% of the renewable power mix. According to their data, Bitcoin mining is the most sustainable business or industry in the world right now.