In this article, we will be taking a look at the 25 countries that mine the most Bitcoin. To skip our detailed analysis, you can go directly to see the 5 countries that mine the most Bitcoin.
Bitcoin, and bitcoin mining in particular, has been one of the most controversial discussions in the past decade, with arguments ranging from it being the savior of private finance to it being considered one of the biggest scams in history. Regardless of what one may think, and despite volatile fluctuations, Bitcoin started to become mainstream in 2017, 8 years after its creation, when the first Bitcoin bubble resulted in explosive popularity, which in turned led to many people losing their life savings after the crash happened. Amid the Covid-19 pandemic, Bitcoin then reached its best ever run in 2021, with an all-time high of around $68,000 in November 2021, only to crash spectacularly over the next year as well. However, by that point in time, the demand for cryptocurrency, not just limited to Bitcoin, had increased massively, with other cryptocurrencies growing even more and major cryptocurrency exchanges such as Coinbase Global, Inc. (NASDAQ:COIN) going public in 2021, and is among the best cryptocurrency exchanges and apps in May 2023.
Companies driving Bitcoin mining
For Bitcoin to be created, it has to be mined, a process which has a significant environmental footprint and has been called out for being damaging to the environment. As cryptocurrencies were seeing their values soar, more and more people started to mine Bitcoin due to higher potential margins, especially in the countries that mine the most Bitcoin, and an important component of possessing the firepower needed to be able to mine Bitcoin are graphics cards, which is where NVIDIA Corporation (NASDAQ:NVDA) came in. One of the only companies in the world with a market cap of $1 trillion, it’s known more for being a top AI company right now, but is also famous among gamers and cryptocurrency miners for its GPUs. With enthusiasm for cryptocurrency declining as the value of top such currencies fell amid scandals including the collapse of FTX (even though it isn’t among the biggest bankruptcies in American history) and the collapse of Celsius, there has been some impact on NVIDIA Corporation (NASDAQ:NVDA). However, the cryptocurrency, while still far away from all-time highs, has had a new lease on life in 2023, with Bitcoin’s value increasing and more people in the countries that mine the most Bitcoin once again increasing their mining operations, and while AI has been the biggest driver of NVIDIA Corporation’s (NASDAQ:NVDA) more than 200% YTD share price gain, cryptocurrency has played a part. At its peak, the use of GPUs were so in demand, even the SEC took notice with the regulator stating the company “failed to disclose that crypto mining was a significant element of its material revenue growth from the sale of its GPUs designed and marketed for gaming”, and resulted in a $5.5 million fine.
One challenge that companies which produce equipment used in cryptocurrency mining is Ethereum’s shift form proof of work to proof of stake will significantly reduce mining requirements and hence, a huge part of demand for cryptocurrency will end as the second largest cryptocurrency will no longer require it.
Cryptocurrency industry outlook
While the top cryptocurrencies have performed brilliantly in the first half of 2023, it is important to remember that Bitcoin and Ethereum, the two biggest cryptocurrencies in the world, are nowhere near their all-time highs, and so far, have been a bit dismal in the second half of 2023 despite a court ruling against the SEC and in favor of the company which made XRP. Recently, another major cryptocurrency called Worldcoin was launched by the CEO of OpenAI, the company responsible for ChatGPT and the project focuses on identifying whether a person online is real or AI, something which is becoming an increasing concern in today’s world.
Meanwhile, though cryptocurrency is currently mainly focused on trading even while providing various applications, it is expected to move more towards nontrading uses as echoed by Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2023 earnings call “The first 10 years in crypto were primarily about trading, but we’ve seen our customer base shift its activity over time where the majority of our active customers now do something with crypto other than trading. My belief is that the next 10 years in crypto will become predominantly about nontrading use cases. So, what could some of those be? Well, payments is a big one. As the scalability of blockchain improves by moving to Layer 2 solutions like Lightning, Optimism, and Base, we’ll see payments emerge as a larger use case. Getting more scalable blockchains will be as important as the internet moving from dial-up to broadband. We’ll also see the rise of decentralized identity systems with decentralized messaging and social apps that will accompany those connected right into those decentralized identities.” Coinbase Global, Inc. (NASDAQ:COIN) has had an excellent performance in the first two quarters, which has led to its share price increasing by 120% YTD.
Methodology
To determine the countries that mine the most Bitcoin, we referred a study carried out by Cambridge University which shows the percentage share of each country by month. We have considered statistics for both January 2022 and December 2021, and used the average of these rankings to determine our list.
25. Italy
Monthly hashrate share in Jan 22: 0.11%
Italy has one of the highest prices for Bitcoin mining, which is why miners are considering other countries, and if this continues, Italy will soon drop off our list.
24. Mexico
Monthly hashrate share in Jan 22: 0.11%
Mexico’s importance in cryptocurrency mining can be seen by the fact that the World Digital Mining Summit 2022 was held in Cancun where the focus was on proof-of-work power, not to mention exploring additional industry trends.
23. Iran
Monthly hashrate share in Jan 22: 0.12%
Iran has used Bitcoin mining as a method to evade sanctions, as earnings from cryptocurrencies allow it to spend hundreds of millions of dollars while avoiding embargoes posted by Western nations.
22. Libya
Monthly hashrate share in Jan 22: 0.14%
Despite being an attractive destination for Bitcoin miners, Libya’s government has also started imposing crackdowns in the country, with a recent one resulting in dozens of arrests.
21. Paraguay
Monthly hashrate share in Jan 22: 0.15%
One of the biggest Bitcoin mining countries in South America, Paraguay recently saw Bitfarms, a Bitcoin mining company, expand operations further after it managed to secure two hydropower contracts.
20. Ukraine
Monthly hashrate share in Jan 22: 0.15%
While Ukraine has benefited massively from cryptocurrency donations in the Russia-Ukraine war, but is likely to drop out of this list as Bitcoin mining operations have been hugely impacted from the war.
19. Netherlands
Monthly hashrate share in Jan 22: 0.21%
A giant greenhouse in the Netherlands is actually using heat from Bitcoin mining to grow cash crops including tulips, with both ironically being associated with financial bubble at their peak.
18. France
Monthly hashrate share in Jan 22: 0.21%
One month ago, the first fully-licensed cryptocurrency provider was formed as a subsidiary of Société Générale.
17. Georgia
Monthly hashrate share in Jan 22: 0.23%
One of the biggest Bitcoin mining companies in the world CleanSpark, Inc. (NASDAQ:CLSK) is purchasing 2 Georgian facilities for a total of $9.3 million, showcasing Georgia’s attractiveness to Bitcoin miners.
16. United Kingdom
Monthly hashrate share in Jan 22: 0.23%
The Department for Environment, Food and Rural Affairs recently gave out a contract to a company which will explore opportunities to carry out Bitcoin mining operations at UK landfill sites.
15. Japan
Monthly hashrate share in Jan 22: 0.23%
The biggest utility company in Japan, TEPCO, has agreed to mine Bitcoin from the excess energy it generates, partnering with a local semiconductor company in this project.
14. Brazil
Monthly hashrate share in Jan 22: 0.33%
Brazil is a major advocate of cryptocurrency, and in June 2023, the country’s central bank provided a payment provider license to Mercado Bitcoin, a cryptocurrency exchange in the country.
13. Indonesia
Monthly hashrate share in Jan 22: 0.35%
While many countries in our list are clamping down on Bitcoin mining, Indonesia is exploring ways in which Bitcoin adoption will provide benefits to the country, and hence, could likely see Indonesia’s rank improve in the coming years.
12. Australia
Monthly hashrate share in Jan 22: 0.36%
An Australian company Arkon Energy raised $22 million in November 2022 to further expand Bitcoin mining operations based on renewable energy, as Bitcoin miners try to shed their image of greatly damaging the environment.
11. Norway
Monthly hashrate share in Jan 22: 0.74%
There is abundant hydropower in Norway, which has contributed to many cryptocurrency miners forming their base in the Nordic country.
10. Sweden
Monthly hashrate share in Jan 22: 0.84%
While Sweden is among the countries with the highest Bitcoin mining rates, a major tax hike in 2023 is likely to further impact an already declining industry in the country.
9. Thailand
Monthly hashrate share in Jan 22: 0.96%
Bitcoin mining has been hampered by actions against miners by authorities across the world and Thailand is no exception, with thousands of cryptocurrency mining rigs seized in late 2022.
8. Ireland
Monthly hashrate share in Jan 22: 1.97%
The fall in Bitcoin prices has greatly reduced margins for Bitcoin miners especially in Ireland where the cost of mining Bitcoin is especially high. Globally, Bitcoin mining is said to consume more electricity in a year than the entire country of Ireland.
7. Malaysia
Monthly hashrate share in Jan 22: 2.51%
While Malaysia is a significant contributor to Bitcoin mining, Malaysian police destroyed over 1,000 Bitcoin mining rigs in 2021 with a steamroller, which happened after the miners stole more than $2 million worth of electricity for their mining operations.
6. Germany
Monthly hashrate share in Jan 22: 3.06%
Germany is considered to be the most crypto-friendly country in Europe and is unsurprisingly among the countries mining the most Bitcoin in the world.
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Disclosure: None. 25 countries that mine the most Bitcoin is originally published on Insider Monkey.