- CoinGecko stated Lebanon is the cheapest country to mine Bitcoin.
- The Bitcoin network’s annual electricity consumption is on par with Malaysia’s.
- Green arguments against proof-of-work mining remain a point of contention.
Bitcoin mining uses vast amounts of electricity to create blocks that form the public ledger – provoking intense debate around energy resources and the expense involved. Recent research from CoinGecko showed Lebanon is the cheapest country to mine 1 BTC, at $260. However, economist Saifedean Ammous has disputed the relevance and accuracy of this.
Mining Bitcoin in Lebanon Deemed Impractical
In response to claims Lebanon is the most profitable place to mine BTC, Ammous underlined that the data was based on “official government” prices which are hyperinflated and artificially cheap for those holding dollars. In addition, the reality of regular blackouts in the country makes mining BTC in the region a wholly impractical affair.
Signing off, Ammous concluded that nobody is mining Bitcoin in Lebanon, despite the apparent low cost of electricity.
Chiming in with Ammous, one commenter, who claimed to be a former BTC miner based in Lebanon, stated that most electricity in the country comes from private generators that incur costs far above the official government figures.
CoinGecko’s research showed that Iran, Syria, and Ethiopia were among the cheapest countries to mine one Bitcoin, at $0.53k, $1.33k, and $1.60k, respectively. On the other end of the spectrum, Italy, Austria, and Belgium ranked the most expensive at $208.56k, $184.35k, and $172.38k, respectively.
Detailing their methodology, researchers determined their figures by country based on the performance efficiency of eight mining machines and their respective power consumptions. This was cross-referenced with information on the countries’ electricity costs in USD per kWh, according to the globalpetrolprices.com website.
The Bitcoin network consumes enormous amounts of electricity as miners compete to win the 6.25 BTC ($162k) block reward plus fees. The process involves using dedicated application-specific integrated circuit (ASIC) miners to guess the next block’s target hash correctly. In doing so, miners collectively guess multiple trillions of hashes per second (TH/s).
Given the enormous computing power used to uphold the Bitcoin network’s consensus mechanism, which has a hash rate of 422 million TH/s at the time of writing, critics have long argued that the network’s electricity consumption is excessive. The Cambridge Electricity Consumption Index equates Bitcoin’s annual electricity consumption of 149.95 TWh per year to that of Malaysia, at 150.8 TWh.
On the Flipside
- Lebanon is undergoing an economic crisis, impacting locals with more pressing needs than Bitcoin mining.
- Although different sources disagree on cost per kWh by country, electricity price arbitrage in proof-of-work mining is still highly relevant for miners to wish to maximize profitability.
- The powercompare.co.uk website gave different figures to globalpetrolprices.com data, showing that Kuwait, Venezuela, and Myanmar were the top three cheapest countries to mine Bitcoin, for $1.42k, $1.63k, and $3.09k, respectively.
Why This Matters
Bitcoin mining remains controversial, particularly among those concerned with climate change. However, Bitcoin will likely stay here, meaning BTC advocates and environmentalists must reconcile their differences.
Read more on ASIC manufacturer Canaan’s latest publicity stunt:
ASIC Creator Teases New “Innovative Bitcoin Mining Product”
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