Large-scale miners are the dominant players in Bitcoin (BTC) mining — we should know because we are one. Having scaled up from a set of mining rigs in my dorm room, our team at Genesis Digital Assets has grown to over twenty industrial-scale mining farms across the globe in just eight years. Every quarter, we continue to scale and build more.
You may think that because mining happens digitally, you can plant a farm anywhere in the world. And while you can mine Bitcoin from anywhere, having on-the-ground operations takes more thought than just setting up shop wherever you like. Whether you’re looking to start your own farm or scouting out farms to invest in, location is going to be the make-or-break factor of your mining operations.
Because it’s such a new industry and there’s no handbook for scaling Bitcoin mining operations, we’ve learned as we’ve gone, experienced every issue that could arise and worked hard to solve it. We’ve essentially been writing the handbook of how to build successful large-scale mining operations — I’ll share some of that insight with you. Here are four major factors to think about when you consider your new mining farm’s location.
Related: 7 lessons learned from building and scaling Bitcoin mining operations
Factor 1: Electricity rates
Because mining operations need fast and powerful mining rigs to solve algorithms quickly, powering the hardware is the most expensive part of a mining operation. Operations that think they’re going strong can get undercut on high electricity prices very easily. So, when it comes to choosing a location, operations need to not only know what electricity options are the cheapest but which modes of electricity are available in that locale.
Bitcoin mining consumes a lot of electricity energy — around 110 terawatt hours per year which is about the electrical energy consumption of a small country. A single ASIC miner runs just over 3000 watts, which is the equivalent of running an AC unit, a dryer or a space heater. Considering that Bitcoin mining farms are running hundreds or thousands of miners all day and night, it’s easy to see how…