Mining is an essential activity for the development of Bitcoin. The miners thus make it possible to validate the blocks of operations within the blockchain. The mining Bitcoin also allows the creation of new corners. Thus, miners receive a reward in Bitcoin for their work. Until now, mining has mainly been carried out in China.
Mining activities require very significant computing power. The Proof-Of-Work protocol , on which Bitcoin is based , is very energy intensive. To increase the profitability of mining, it is therefore important to reduce the energy bill. This is why the major mining players are located in countries which offer advantageous conditions in this field.
For the moment, China is one of those countries. It is even the country that hosts the majority of Bitcoin mining activities. It is currently estimated that 65% of mining is carried out in China. However, the situation is in being Evolu tion . The significant weight played by China in mining poses a problem for a crypto based on the decentralization of its system.
In addition, other countries are also starting to offer attractive energy prices for miners. This is the case for the Nordic countries, starting with Sweden and Norway, as a report published by the Bloomberg agency noted.
The Nordic countries are not particularly known for the low cost of their electricity. But in 2020, thanks to favorable weather conditions , these countries have returned to the forefront. In Sweden and in Norway, the year 2020 was the most moist and fresh for 20 years. This high rainfall made it possible to fully use the strong capacities of these countries in terms of hydraulic stations. So much so that the price of electricity has flirted with zero for long periods of time during the year. Electricity produced from renewable energy as well as its low cost have thus prompted many miners to relocate to these Nordic countries.
“There is a very important strategic change underway which sees the transfer of mining activities from China to countries like Sweden. “
Philip Salter, Head of Operations at Genesis Mining Ltd.
Overall, over the year, the average price of electricity in Sweden was three times cheaper than that in Germany. The cost of electricity in Norway was the lowest among the thirty countries that are part of the International Energy Agency. According to a study by the World Bank, a mining center would cost less to operate in Sweden and in Norway at the moment. The cost would be lower than in China, Kazakhstan or Mongolia, countries known for their mining activity.