Mining just one bitcoin in South Korea costs $26,170, according to data released by lighting and furniture firm Elite Fixtures. The Elite Fixtures data also showed that Venezuela is the cheapest country in which to mine bitcoin.
Bitcoin mining is costing South Koreans a lot of money. So-called bitcoin miners are vital to keeping the underlying blockchain, or distributed ledger, network tick. A blockchain network is essentially a huge decentralized database that maintains a continuously growing record of transactions or other data. Miners solve complex mathematical problems to validate transactions and add them to the blockchain.
The Elite Fixtures data also showed that Venezuela is the cheapest country in which to mine bitcoin. It costs $531 to mine the world’s best known virtual currency there. Some Venezuelans have turned to bitcoin mining for survival in the economically struggling South American country.
And Venezuela President Nicolas Maduro is banking on a cryptocurrency called “petro,” backed by the country’s oil, gas, gold and diamond reserves, as a way to get around U.S. sanctions.
Mining digital currency uses up a lot of electricity, as miners utilize huge rigs of computers for the process. However, in return for their work, voluntary miners are rewarded with a sum of bitcoin as well as a transaction fee paid by people who transact with the cryptocurrency.
According to Blockchain.info data, the total revenue earned by all bitcoin miners hit an all-time high of $53 million on December 17, the same day that bitcoin notched its highest price ever of $19,783.21.
The Elite Fixtures study analyzed electricity prices from 115 different countries, using data provided by governments, utility firms and the International Energy Agency. It worked out the price of power consumption based on averages from three popular cryptocurrency mining rigs.