Cryptocurrency Miners Flocking to Nordic Countries

In a recent cryptocurrency trend, miners have been trying to find ways to maintain profitable mining operations. One such method is to move their operations to countries with lower electricity costs, such as Norway and Sweden. 

Mining is the essential action required for blockchains to stay secure and decentralized. As a miner, you need computing power and copious amounts of electricity, which doesn’t come cheap.

Some analysts estimate that the energy cost to mine a singular Bitcoin can range from $531 (Venezuela) all the way up to $26,170 (South Korea). So how does this equate on a worldwide level? Digiconimist estimates that Bitcoin miners will consume over 125 TerraWatt hours of power by the end of 2018, which is an insane amount of electricity. 

Despite this, many entrepreneurs and cryptocurrency enthusiasts have continually turned to mining as a way to gain a profit. This proved successful in the past, but as of late, miners have found it much harder to preserve and maintain profitable mining margins in this cryptocurrency downturn. Increased costs and difficulty have been just a few factors which have slowed the profits of many miners.

Greener Pastures

A common trend has been for cryptocurrency miners, whether small or large, to move to areas where costs for mining are substantially less. As well, moving to countries that use alternative energy has been a way in which miners can ease their environmental conscience.

At first, China was the location for many mining organizations to start operations due to extremely low electricity costs. However, at the start of 2018, China began cracking down on cryptocurrency mining. Large mining operations that operated in China have started to move in search of better prospects.

Miners began moving en-masse to countries like Sweden and Iceland in search of spectacular electricity rates. Prices per KWH (Kilowatt Hour) in these Scandinavian and northern-European countries are often at least 30% below the averages of other European countries.

Now it appears that Norway and Sweden are the latest hotspots for cryptocurrency mining. Bitfury, with its massive Bitcoin mining facilities, has recently announced its mining plans for the country of Norway after meeting with Norweigan government officials.  Bitfury plans to make investments of over $35 million USD into the project and intends to hire locals to run the facility. Not only does Norway have sustainable and affordable electricity costs, Norway’s government has also proven itself to be accepting of cryptocurrencies and does not intend to regulate the space heavily.

In an announcement made at a press conference, Bitfury’s CEO stated:

Norway is a perfect match for Bitfury’s focus on innovation and growth,

In another Nordic country, Sweden, prices per KWH are at just around 6.5 European cents or the equivalent of 8 American cents. This price is substantially lower than the prices seen across Europe, which average out at just around double Sweden’s average. Hive Blockchain, a Canadian mining company, recently moved to Sweden to start an Ethereum mining facility. This move has so far proven successful with Hive taking advantage of the cheap energy sources found in Sweden. 

The cheap electricity is not the only factor which makes these countries appealing for miners. Over the recent decades, these Nordic countries have cemented themselves as providing sustainable electricity (at cheap prices) for those miners who are environmentally conscious. 

Canada: An Unexpected Mining Safehaven?

However, Canada has proven itself to also be an appealing option for miners to set up shop. In some areas in Canada, costs for electricity can fall as low as 5-6 cents per KWH. The reason for such a cheap electricity cost is due to the fact that Canada has been a key proponent in the use of hydroelectricity, which is often cheap while still being sustainable. In some cases, hydroelectricity can actually be cheaper than traditional fossil fuels.

North American mining giant, Hyperblock, recently announced their acquisition of another mining company based in Canada by the name of CryptoGlobal. Once completed, Hyperblock will have new massive mining facilities running in Canada at a (relatively) measly 4-5 cents per KWH. This few cents differential between electricity prices in Nordic countries and Canada can often mean the difference between millions of dollars of profit. 

https://twitter.com/Hyperblocktech/status/977192435523751936

Despite these cheap prices, some larger-scale miners and mining companies may be hesitant to run their operations in Canada due to some of the government’s attempts to regulate the crypto space. 

Overall, cryptocurrency miners have shown themselves quite willing to move across the globe in order to shave costs. China was the main spot for some time, but now miners are moving into the Nordic countries, particularly Norway and Sweden, to set up shop.

If you were a miner, where would you set up operations? Please tell us in the comments below.

Images courtesy of Twitter/@Hyperblocktech, Twitter/@HiveBlockchain, Shutterstock, and Bitcoinist archives.