Bitcoin (BTC) Mining Lives On as Cheap Electricity Ensures Low Breakeven Prices

As BTC prices stagnated around $3,600, questions over the viability of mining were raised once again, but the cost of electricity ensures that mining farms will survive.

Bitcoin (BTC) mining seems to be stabilizing, with rates near 40 EH/s. For months, worries that miners would abandon the network added to the pessimism, and talk of mining farms closing at various BTC price ranges sparked fears of dwindling hashrates. According to a still relevant report on breakeven prices by Elite Fixtures, profitability is still possible, depending on countries and electricity costs.

As it turns out, cheap electricity is available for miners in some regions, meaning they can work at much lower BTC market prices. For others, the breakeven price is above $26,000.

It is difficult to estimate which mining establishments would be viable as some farms may not break even at prices as high as $5,800. Other suggested values are $3,800 and $4,500.

As BTC slid as low as $3,400 in the past days, the list of countries with favorable electricity prices shrank further. Kosovo, a small country in the West Balkans, has been known as one of the larger mining hubs in Europe. The breakeven point there is $3,133, close to the current market prices.

BTC held around $3,599 on Tuesday, which is above China’s breakeven price of $3,172. The country remains the biggest mining hub, giving rise to expectations of hashrate growth in the months ahead as the wet season boosts the availability of cheap hydroelectric power.

Still, Venezuela remains the winner by a massive margin with a $531 breakeven price due to state subsidies for electricity and the collapse of the local currency. Belarus and Ukraine are European havens with a relatively low breakeven price: $2,177 and just $1,852, respectively.

In the USA, however, miners are working at a loss given a general breakeven price of $4,758.

Yet another factor is a new generation of ASIC mining machines, as well as the recent official release of AsicBoost from Bitmain. This means more efficient use of electricity and potentially a slightly lower breakeven price. Some miners may also continue to work at a loss and keep the BTC block rewards and fees in hopes of a price recovery.

The health of Bitcoin mining is important not only for security against attacks but also because miners usually run full nodes. This makes the network larger and more decentralized, hence less vulnerable to node communication attacks and attempts at censoring node connections.

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