Bitcoin is undoubtedly the first currency that comes to mind when it comes to crypto money. As of 12:00 on June 29, Bitcoin (BTC) production, which is at $ 30,380, requires a process called Bitcoin mining. Equipment with electricity and high processor speed is essential for Bitcoin mining.
The fluctuating course of energy prices since the start of the Russia-Ukraine War has also begun to affect Bitcoin mining. While most countries have experienced an increase in energy prices in recent years, this is also reflected in Bitcoin’s production costs. Therefore, in order to minimize Bitcoin production costs, miners began to prefer to live in countries with low electricity prices. Chief among these countries is the oil-rich Kuwait.
OIL RICH KUWAIT
Kuwait, a small country in the Middle East on the Persian Gulf, borders Saudi Arabia and Iraq. The most well-known feature of Kuwait is that the Kuwaiti dinar is one of the most valuable currencies in the world. Besides. The country with a population of 4.5 million is the 6th largest oil producer in the world.
Energy prices such as gas and electricity are also quite low in oil-rich Kuwait. In fact, according to a study, the cheapest electricity in the world is in Kuwait. As of July 2022, electricity in Kuwait is only 3 cents per kilowatt hour. This too It means that it costs $1,393.95 to mine one Bitcoin by mining in Kuwait.. A Bitcoin produced in Kuwait brings almost $29,000 profit to its producer. This makes Kuwait the most profitable Bitcoin mining country in the world.
Kuwait has a complex relationship with cryptocurrencies. Unlike many of its neighbors in the Middle East, such as Saudi Arabia and Qatar, Kuwait has not yet banned cryptocurrency mining. However, the government does not recognize Bitcoin or other cryptocurrencies as legal tender, and financial institutions cannot process transactions.
Kuwait does not tax on income generated by individuals, but is set to tax legal entities mining Bitcoin at a rate of 15 percent for companies in Kuwait or one of the central Gulf Cooperation Council states.
Other countries where Bitcoin mining is most profitable are Algeria, Sudan, Yemen and Ethiopia. The costs of producing one Bitcoin in Algeria and Sudan are $4,100 and $4,700, while Yemen and Ethiopia cost over $7,000. Moreover, due to the ongoing civil unrest and wars in Sudan, Yemen and Ethiopia, these countries are quite insecure for mining. Kuwait, on the other hand, stands out as the 39th safest country in the world among 163 countries according to the United Nations’ Global Peace Index.. The country where mining is most expensive is Venezuela.
BITCOIN MINING
So how is Bitcoin mining done? Bitcoin mining is done by adding a new transaction record on a blockchain, just like a bank ledger is kept digitally. Of course, this record is not easily added to the blockchain. Crypto miners also need to solve a complex digital equation created by the blockchain system. A computer with high processing power is required to solve this equation quickly and easily. A lot of electricity is consumed when solving the equation. It takes an estimated 1449 kilowatt-hours of electricity to produce a single Bitcoin. This is equivalent to the electricity consumed by a house in the USA in an average of 13 years. The miner who solves the equation is rewarded with Bitcoin by the blockchain. It is estimated that over 19 million Bitcoins have been mined by 2022.
Sources: Visual Capitalist, AIBC, UN
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