The Nordic region has again become a lucrative place to mine cryptocurrencies thanks to a collapse in electricity prices

The Nordic region has once again become a lucrative place to mine cryptocurrencies thanks to a collapse in electricity prices

The wettest weather in at least 20 years has boosted production from hydropower plants, leaving Sweden and Norway with some of the lowest electricity prices in the world.The resulting inundation of the main raw material used to make the virtual coins coincided with a year in which the price of Bitcoin tripled

The currencies are produced in giant computer farms that process complex algorithms in halls the size of airport hangers, which makes electricity one of the most important inputs as operations sometimes use as much electricity as 70000 households Current market dynamics offer major miners alternatives to places where Bitcoin is normally made, such as China, Kazakhstan and Canada

Your luck follows several years of poor margins due to higher electricity costs and lower prices for most virtual currencies. Many of the miners attracted to the region during the last rally in 2017 have left

“Those who, like us, have survived the difficult times are pretty happy now,” said Philip Salter, operations manager at Genesis Mining Ltd in Hong Kong, which operates a data center in Boden, Sweden. “There were times when we Made no profit at all, but in the last year our profitability has more than tripled “

Unusually wet weather and mild temperatures have brought the water reservoirs in the entire Nordic region to their highest level in more than 20 years and flooded the generating capacity of the area The result is electricity prices close to zero for longer periods The average prices this year are around a third of the prices in Germany, Europe’s largest electricity market

Norway had the lowest electricity prices for industrial users of the 30 member states of the International Energy Agency last year It also had the lowest prices for non-households in the European Union in the first half of this year, just beating Iceland, another hotspot for cryptocurrencies,

“These prices are among the lowest in the world if you don’t factor in fees and taxes,” said Tor Reier Lilleholt, Head of Analysis at Norwegian consultant Wattsight AS. “What we saw this summer was that the low values ​​were over have been registered for such a long period of time “

The biggest environmental benefit of mining in the Nordic region is that the electricity is virtually carbon-free and consists mainly of hydro, nuclear and wind power, which is becoming increasingly important and for the many institutional investors interested in cryptocurrencies is one of the main drivers behind the recent price hike, the flow of coins from the Nordic region is helping to lower Bitcoin’s political risk profile

“There is a very important strategic shift from mining in China to mining in western countries like Sweden as Bitcoin investors become more public and want more stability and critical security,” said Salter of Genesis. “It’s one of the biggest developments in the world Bitcoin Mining To Look For “

Comparing electricity prices around the world is difficult as they vary across industries and regions due to taxes, fees, and subsidies.A World Bank attempt measuring the bills of an imaginary warehouse in each nation’s capital brings Sweden and Norway far below China, but above other cryptocurrency manufacturing centers like Kazakhstan and Mongolia

Electricity costs are expected to become even more significant for miners The hash rate, the computational effort required to make each coin, is steadily increasing, and in May miners’ rewards were cut by something called a halving, a decrease in the number of tokens they have preserved to maintain the scarcity

Many of the miners who left the region after the 2017-18 boom and bankruptcy could return, following the announcement by Dutch blockchain company Bitfury Holding BV that it will invest $ 35 million in expanding its Norwegian site in November , could mark the beginning of a new trend

“We have seen a significant increase in investor appetite for Bitcoin mining opportunities in Norway,” said Tyler Page, a business developer at Bitfury. “This year’s energy prices have been particularly low as Bitcoin prices have risen”

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World News – UK – Bitcoin miners in the Nordic region are getting a boost from cheap electricity