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Three Countries Where It’s Cheapest To Mine Cryptocurrencies

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The crypto winter which lasted for pretty much the whole duration of 2018 and then some in 2019 is finally over. The survivors are now licking their wounds and preparing for yet another crypto market consolidation, hoping that the next time such a recession occurs they will be ready.

However, there are some companies out there, that didn’t lose pretty much anything during the crypto winter. Sure, they weren’t profiting as much from mining Bitcoin anymore, but they were somehow still staying afloat without having to lay off staff or cut costs.

Which countries managed to provide such an environment for these companies? What type of laws did they have and how much did it cost to run a Bitcoin mining right there?

There are exactly three countries that provided such opportunities for large mining groups. Let’s see their crypto mining policies just to get a feel as to how they managed to survive.

Iran

Although the government of Iran is starting to be a bit sketchy towards cryptocurrencies, their previous national policies of not touching crypto miners but banning crypto trading were working out more or less alright.

It was extremely profitable for the crypto miners themselves as they didn’t disturb the authorities and the authorities stayed away from them as well.

During 2018, mining one Bitcoin was around $3,700 including all of the costs on electricity and staff in Iran.

Therefore, crypto mining companies there managed to stay afloat without having to cut too many costs or seize their operations completely. But how?

Well, there used to be (and still are) very nifty subsidies on energy consumption in Iran. The country’s Ministry of Energy would pay more than half of the actual payment for the amount consumed so that the population would have at least some kind of benefits in terms of finances.

The crypto mining companies were inadvertently included in the “population” and they used these subsidies to their fullest potential.

Now though, it seems that the government is starting to face some financial issues after renewed tensions with the United States and therefore will have to cut back on too many subsidies. This means making the crypto miners either pay for their operations and energy consumed, or simply leave the country.

Unfortunately, Iran is leaning towards the latter option.

Georgia

Georgia sometimes gets lost in the background of the crypto noise as it doesn’t really get featured a lot on the mainstream blockchain media.

However, the country is a leading cryptocurrency producer right behind the United States.

According to 2017 measurements, Georgia was mining around 15% of available Bitcoins at the time and was on third place behind the United States and China.

Since China is already very shaky towards crypto mining operations, there’s a high chance that Georgia could move to the second position and potentially become a crypto hub in the future.

According to a Georgian website about capital investments, many local businessmen have devoted a large chunk of their net worth towards establishing personal crypto mining farms. Some go for Ethereum, while others are contempt with Bitcoin.

However, none can match the computing power that Bitfury is able to field in this day and age. It’s the largest crypto miner in Georgia, and one of the largest crypto mining companies in the world.

There are multiple others as well such as birtvi which mostly does cloud mining.

In a sense, you get the point, the mining business is booming in Georgia and there are exactly three reasons as to why.

The first reason is that electricity is dirt cheap in the country. For example, mining one Bitcoin cost around $3,500 in Georgia when cryptos were at their lowest. There were some losses but not nearly as high as companies like Bitmain had to face.

The local labor force is also very cheap due to the small economy and inflation of the local currency. For example, paying a senior database engineer around $50,000 a year would be considered the 1% of the country’s population, not talking about junior positions.

The third reason is the revenue tax which is only 20% and the VAT of around 18%. Compared to major European states and the US it’s pretty much nothing. Furthermore, there are no taxes on crypto capital gain, therefore the miners can easily become institutional investors alongside large private traders.

Contrary to Iran, Georgia is planning to increase their blockchain space to a point where they can entice large crypto companies to come to the country and establish offices there, and many are starting to see the region as a profitable decision, especially those willing to do some mining in the future.

Venezuela

Although Venezuela is by far not the largest crypto mining country in the world, it has definitely been classified as the cheapest option one can find pretty much anywhere across the globe.

According to studies, the miners would have to pay around $550 for every mined Bitcoin and that was when BTC was worth around $12,000.

Even compared to a crypto friendly country like Georgia that is an extremely low cost.

This could be due to the country’s capabilities of maintaining very cheap prices on energy due to oil reserves and multiple other sources, but the numbers are varied.

When it comes to the salaries for the workers, they’re practically non-existent compared to the profits that the miners can manage.

One terrible flaw of Venezuela though is its government which has started to impose serious restrictions on local mining operations as well as trading different currencies. They did this in order to promote their own national cryptocurrency the Petro, which is backed by oil.

Needless to say, nobody was interested in using a cryptocurrency which is maintained by the government, who has already caused hyperinflation with the country’s fiat currency the Bolivar.

Regardless though, we’re here to discuss whether it’s cheap or not to mine Bitcoin in a specific country and Venezuela ranks the highest above them all.

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Crypto Trader Says Mysterious Whale Building Massive Buy Walls – Plus Ethereum, Ripple and XRP, Litecoin, Zcash

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From a mysterious crypto whale on Binance to a new fork of Zcash, here’s a look at some of the stories breaking in the world of crypto.

Ethereum and Bitcoin

Crypto traders say an Ethereum whale is making a huge splash on the crypto exchange Binance.

According to Three Arrows Capital CEO Su Zhu, the whale has bought 300,000 ETH worth about $70 million in recent weeks. The most recent buy order clocks in at 20,000 ETH worth about $4.5 million.

The big buy order triggered a debate on whether the whale is trying to create the illusion of demand to push the price of Ether, Bitcoin and the entire crypto market higher.

On Sunday, a separate crypto whale was accused of selling 15,000 ETH on the crypto exchange Bitstamp and triggering a cascade that pushed Bitcoin and the overall crypto market at large into a downward spiral.

Ripple and XRP

The Canada-based crypto exchange CoinField has rapidly expanded its use of XRP as a base pair on the platform. The exchange says it now has 30 coins paired directly with XRP.

Litecoin

Litecoin creator Charlie Lee just sat down for an interview with MaiCoin. The podcast looks at Facebook’s Libra, Lee’s upcoming meeting with Justin Sun and Warren Buffett and Asia’s love for Tether (USDT).

Lee says lunch with Buffett is exposure for crypto. As for flipping the vocal crypto critic into a Bitcoin or Litecoin supporter, Lee says,

“It’s not possible to convince him. He doesn’t invest in technology stuff, so he’s not and won’t be into Bitcoin, and that’s not surprising at all.”

Zcash

The privacy coin Zcash just had its first “friendly” fork, creating a new coin called Ycash. The new coin was created by Zcash team member Howard Loo, and is described as having a number of goals that differ from Zcash.

“We are launching Ycash to restore a goal – mining on commodity hardware – that appears to have been largely abandoned on the Zcash blockchain. We are also launching Ycash to uphold a promise – that the Zcash Founders Reward would be forever capped at 2.1 million coins – that we fear will come under increasing pressure between now and the expiration of the Founders Reward in October 2020.”

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Japan Eyes Development of SWIFT-Like Platform for Cryptocurrencies: Report

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While world leaders are facing the threat of Libra and Facebook’s massive userbase of 2.5 billion, enough to transform the entire global financial system seemingly overnight, Japan is spearheading the development of a SWIFT-like network for cryptocurrency, reports Reuters.

Similar to the SWIFT network used by banks, the new international crypto-based platform would allow banks to track transactions and more effectively fight money laundering.

Set to launch in the next few years, it would be monitored by a team related to the inter-governmental Financial Action Task Force (FATF).

Given the decentralized nature of cryptocurrencies which run on public blockchains, however, it remains unclear how the system would conduct its surveillance.

Meanwhile, the world’s financial leaders are moving in concert to stay ahead of the Libra threat. Gathering at the G7 conference in France on Wednesday, Italy’s finance minister told Reuters,

“There’s widespread concern and a decision that this concern should translate into action… to control what’s going on.”

The news outlet reports that a source said there was “a very large consensus on the need to act quickly” in response to the changing landscape of money and global payments and with Facebook’s looming entry into the industry.

Japanese Finance Minister Taro Aso is initiating plans for a comprehensive assessment of Facebook’s Libra.

Said Aso following the first day of the G7 gathering,

“Applying existing regulations alone may not be enough. A comprehensive examination is needed to see if Libra poses new challenges that existing rules do not take into account…

On the other hand, authorities need to respond in a timely fashion so they’re not behind the curve.”

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Facebook Libra Risks to Financial Stability Demand ‘Highest’ Regulatory Standards, Says G7

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The G7 group of nations has warned that cryptocurrencies such as Facebook’s Libra are a threat to global financial stability.

A task force set up by the G7 to examine the issues said that rules of the “highest” standards are needed to minimize the use of digital currencies in money laundering and funding terrorism, Reuters reportsThursday.

Following a meeting of finance chiefs from the G7 in Chantilly, France, this week, the group also said it would address tax issues raised by the digital economy, as per a draft summary of the meeting obtained by Reuters.

As expected, Facbook’s Libra and its perceived risks to the monetary control of regulators was high on the agenda at the meeting, although some benefits were also observed.

Benoit Coeure, European Central Bank (ECB) board member and head of the G7 task force, told the G7:

“A global stablecoin for retail purposes could provide for faster and cheaper remittances, spur competition for payments and thus lower costs, and support greater financial inclusion.”

Yet, he went on to say that such cryptocurrencies raise “serious risks” to policy priorities, such as anti-money laundering, financing of terrorism, consumer and data protection, competition and compliance with tax rules.

Bank of France governor and and member of the governing council of the ECB, Francois Villeroy de Galhau, also said that, while regulators seek to encourage innovation, “that cannot come to the detriment of the security of the consumer.” He also said more details were needed regarding gray aspects of Facebook Libra.

A piece in the Financial Times today further quotes Coeure as saying that cryptocurrencies like Libra “could also pose issues related to monetary policy transmission, financial stability and the smooth functioning of and public trust in the global payment system.”

French finance minister Bruno Le Maire echoed previous concerns over the threat to the dominance of national currencies by a token launched by a tech firm with billions of users, saying: “The sovereignty of nations might be weakened or jeopardised by these new currencies.”

The draft document from the G7 stated that “significant work” is required from developers of stablecoins like Libra before regulatory approval is likely to be granted.

The FT cites the document as saying:

“As large technology or financial firms could leverage vast existing customer bases to rapidly achieve a global footprint, it is imperative that authorities be vigilant in assessing risks and implications for the global financial system.”

Among its draft recommendations, the G7 says such stablecoins must meet the highest regulatory standards and come under regulatory oversight. A good legal basis in jurisdictions where they operate is also key in order to guarantee adequate protection for stakeholders and users.

The group further lists the need for “operational and cyber resilience” and secure, transparent management of assets to protect market integrity.

source:.coindesk.

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