When it comes to mining there are many decisions to make, from which blockchain to mine to what hardware to purchase. However, one factor which often gets left out of the conversation is the mining location. The location of mining equipment can play an important role in determining mining profits and longevity of a mining operation.
Pick the wrong location and your attempts to mine successfully could be thwarted in an instant, causing more trouble and cost than anticipated. This is because within the decision of where to locate a mining operation are three key factors: energy prices, temperature, and local government. When put together, these factors will determine the best location to mine cryptocurrency.
The major cost in cryptocurrency mining is for the energy used in the process of mining. Energy costs can vary from country to country depending on energy availability, consumption, taxes, and government regulations.
Energy prices are measured per kilowatt-hour (kWh). The energy cost to mine a blockchain will be dependent on the cryptocurrency you are looking to mine, as each cryptocurrency varies in how much energy is consumed in order to successfully mine.
Before making the choice to mine in a given country, make sure to check the cost of energy, which can vary greatly between nations. Additionally, finding a nation which is also an advocate of lower cost energy sources such as hydroelectricity will be a great help in keeping energy costs down.
Anyone who has used cryptocurrency mining equipment knows a key factor in success is maintaining a low temperature in order to adequately cool the hardware. Mining hardware is likely to overheat as it runs complex mathematical computations nonstop. ASIC and GPU mining equipment can get as hot as 90℃ but will begin to degrade at these higher levels.
There are various and often innovative, methods miners have used to cool their equipment. Some of these methods can work (but can require additional investment in cooling equipment), but many are unfounded and could be detrimental to the long-term health of the hardware itself. Instead, it is best to look to operate mining equipment in a region of the world in which temperatures are conducive to mining hardware. This means somewhere that offers cool temperatures to keep hardware from overheating as it is continuously operating.
Even as you have considered the energy prices and temperature of a nation, local government and regulation may be the most important factor to consider. Currently, there are many countries which have banned cryptocurrency altogether, while other countries allow mining operations but may not be the best countries to deal with as a business.
For instance, some countries may seem like a great place to mine because of their cheap energy prices and/or low temperatures. However, many countries where the government is corrupt, or make it difficult for new businesses to operate will make it difficult to mine successfully. Additionally, local governments which are not advocates for the cryptocurrency industry are likely to tax mining in ways which make profitability extremely difficult.
Make sure your mining equipment is operating in a country where the local government is friendly to cryptocurrency mining businesses and supportive of mining operations. This will go a long way to determining the long-term viability of your mining operation.
Sweden Fits the Bill
When examining these three factors in successful mining it becomes clear that Sweden is an optimal place for cryptocurrency mining. The energy prices in Sweden are some of the lowest in the world as almost half of the entire country’s energy usage comes from renewable sources.
Sweden is a Nordic country with a very good climate for keeping mining hardware cool. In Stockholm temperatures rarely get above 20℃ even during the summer months. Additionally, the further north in the country you go, the lower the temperature. For instance, in Norrbotten County, the average temperature is 1.3℃, perfect for maintaining low hardware temperatures.
The Swedish government has been forthright about their feelings on cryptocurrencies, and have supported the industry wholeheartedly. In fact, Sweden may become one of the first countries with its own cryptocurrency, a testament to their support and belief in this new technology.
Sweden allows miners to increase their profitability while keeping their hardware safe. If you are interested in moving your mining operations to Sweden feel free to contact us at Blockbase Mining to answer any questions you might have about mining in the region.