Mining is one of the primary methods to generate a profit in the cryptocurrency industry and is considered by many as one of the more lucrative mechanisms in the market if done correctly. These gains depend on different factors which we will analyze in the following guide.
What Is Cryptocurrency Mining?
Cryptocurrency mining consists of a cluster of computers on a global scale. Each computer competes with the other to solve a mathematical problem, which is specified in the creation of a block in a blockchain network of a certain cryptocurrency.
It is important to note that the greater the computing power, the greater the chances of mining a block, and, accordingly, of obtaining the commission reward stipulated in the protocol of said cryptocurrency.
For this reason, today we can find various modalities to mine cryptocurrencies, among which pools and cryptocurrency mining farms stand out.
Factors Affecting The Profitability Of A Cryptocurrency Mining Business
- Property ownership: Legal security of the property in which the mining is done.
- Electricity costs: the cost of the electricity needed to mine the cryptocurrency.
- Internet speed: the faster the internet speed, the more blocks one can mine.
- Climate conditions: the cooler the weather, the easier it is to keep the mining equipment cool, thus requiring less electricity to keep said equipment cool.
Based on these characteristics, here are the best countries in the world to mine cryptocurrencies:
It maintains a balanced standard among the measurement factors that have been taken into consideration:
- Latvia accumulated 72 points in the 2020 Property Law Index.
- The country’s commercial electricity rate is USD 0.18 per kWh.
- In terms of Internet speed, Latvia occupies a very good position worldwide, with download speeds as high as 32.74 Mbps, coming in 16th place globally.
- Latvia has an average annual temperature of 5.65 degrees Celsius, which is quite generous in helping to cool down digital mining equipment.
As an interesting final piece of information, the Latvian government recognizes cryptocurrencies and approves of them, though it also collects taxes on such assets.
Together with Japan and Malta, Switzerland is one of the countries with the best policies for crypto-Cosmo entrepreneurs. Most of its indicators are nearly perfect, and if its energy cost had been lowered it would be in the first position:
- Switzerland accumulated 87 points in the 2020 Property Law Index.
- The cost of commercial (non-domestic) electrical service in Switzerland is $0.21 per kWh.
- Switzerland has excellent internet download speeds of 38.85 Mbps. In this line, Switzerland is in the ninth position worldwide.
- Switzerland has an annual average temperature of 5.50 degrees Celsius, quite generous in contributing to the cooling of digital mining equipment.
Georgia is another one of the most crypto- and blockchain technology-friendly countries.
- Georgia accumulated 69 points in the 2020 Property Law Index.
- The cost of commercial (non-domestic) electric service in Georgia is an incredible $ 0.06 per kWh, without a doubt, the lowest in this ranking.
- In contrast, Georgia’s internet download speed is not the highest, but it is still not negligible at 7.14 Mbps. In this line, Georgia is located at 88th position worldwide.
- Georgia has an average annual temperature of 5.80 degrees Celsius, quite generous in contributing to the cooling of digital mining equipment.
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Estonia is also on the list of the friendliest countries for decentralized cryptocurrencies, not to mention that it has created an entire online government ecosystem.
The most interesting thing about the e-government initiative is that it’s not only aimed at native Estonian citizens, but also international entrepreneurs. All this through laws and policies that promote legal and proprietary security for entrepreneurs.
As if this were not enough Estonia has quite favorable indicators to exercise cryptocurrency mining:
- Estonia accumulated 83 points in the 2020 Property Law Index.
- The cost of commercial (non-domestic) electrical service in Estonia is $ 0.17 per kWh.
- Estonia has an excellent internet download speed of 31.55 Mbps, thus ranking 18th in the world.
- Estonia has an average annual temperature of 5.10 degrees Celsius, quite generous in contributing to the cooling of digital mining equipment.
This North American country is located in the present list because it is the place with the best climatic conditions to refrigerate mining equipment and a fairly reasonable electricity rate. Likewise, cryptocurrency mining is a legal activity and it is a democratic nation that respects the principles of private property.
- Canada accumulated about 88 points in the 2020 Property Law Index, occupying the eighth position worldwide, which is fantastic.
- The cost of commercial (non-domestic) electrical service in Canada is $ 0.10 per kWh.
- Canada has a good internet download speed of 28.76 Mbps, thus ranking 25th worldwide.
- Canada has an average annual temperature of -5.35 degrees Celsius, undoubtedly the best on this list to cool digital mining equipment.
The Norwegian government stated in February 2017 that it would not impose taxes on the purchase or sale of Bitcoin. Furthermore, the Norwegian Tax Administration does not define cryptocurrencies as money but as digital assets. Despite this, it is very safe to trade and mine cryptocurrencies in this Nordic nation.
- Norway accumulates 84 points in the 2020 Property Law Index, occupying the 20th position worldwide.
- The cost of commercial (non-domestic) electrical service in Norway is $ 0.07 per kWh.
- The internet download speed in Norway is among the best in the world at 38.46 Mbps, thus ranking 11th worldwide.
- Norway has an annual average temperature of 1.50 degrees Celsius, ideal for cooling digital mining equipment.
The Bottom Line
If you plan to make bitcoin investments or use another type of cryptocurrency, these crypto-friendly countries could help you. So, make sure you invest after careful inspection and leave no stone unturned for safety. Also, note that as regulations of crypto countries might change from time to time, it’ll be wise to check the updated information before you make any investment in a country.
You can also speak to a crypto expert to help you. Since they have professional knowledge, they can be better equipped to guide you.