Surprise! Majority of BTC Energy Sourced from Hydro / Wind / Solar

By   Christopher Bendiksen 6th June 2019

It’s that time of year folks!

The CoinShares Bitcoin Mining Report returns in its third iteration with another snacky treasure trove of updated figures, maps and sources.

As always we do recommend reading the full report which can be found in all its un-summarised glory here.

Also, for those of you who are just arriving to the mining discussion — in this iteration we have skipped the introductory treatments of mining and Proof-of-Work on a conceptual level and instead refer readers to our previous work here and here.

As always, we remain cognisant of the brutal time pressures exerted on our beloved readers by the realities of modern life, so in the spirit of the internet age we have condensed our main findings in a convenient and accessible TL;DR version:

  1. Boringly (this is a good kind of boring) the network is growing in line with its 5-year trends. The minor exception here is mining gear whose efficiency has grown slightly faster than the trend. This also means Bitcoin mining is highly-profitable at the moment
  2. Our estimated average all-in ROI (breakeven) costs —  at ¢5/kWh, 15% additional Cooling, Other OPEX on 18-month depreciation schedules and= $5,700
  3. Our estimated average cashflow breakeven levels — at ¢5/kWh and 15% additional Cooling & Other OPEX at $3,300.
  4. Miners are still majorly confined to regions dominated by cheap hydro-power, such as Scandinavia, The Caucasus, The Pacific North West, Eastern Canada and Southwestern China. We believe this to be a direct consequence of the extremely low electricity prices available in these regions, especially where the hydro-power is relatively under-utilised.
  5. The previously observed trend of miners leaving China seems to have lost momentum over the last 6 months. While we find this to be interesting, it might also be muddled by the advent of the ‘Fengshui’ wet season in Southwestern China, offering miners exceptionally cheap electricity prices. Developing story here, more to come.
  6. The migrations we do observe are mainly confined within China where miners will opportunistically relocate their gear between Xinjiang/Inner Mongolia in the dry season and Sichuan/Yunnan/Guizhou in the wet season. While this is certainly an interesting pattern certain factors such as high relocation costs and breakage rates seem to act as dampening factors to the overall migratory behaviour.
  7. Finally, using a combination of estimates of global mining locations and regional renewables penetrations we again calculate the Bitcoin mining industry to be heavily renewables-driven. Our current approximate percentage of renewable power generation in the Bitcoin mining energy mix stands at 74.1%, more than four times more renewable usage than the global average energy mix. ***this estimate is marginally lower than our November 2018 estimate of 77.8%, reflecting both a margin of error and the upstart of major mining clusters in fossil- dependent regions such as Iran as well as relocation away from hydro-dependent regions such as Oregon.


Please note that this Blog Post is provided on the basis that the recipient accepts the following conditions relating to the provision of the same (including on behalf of their respective organisation).

This Blog Post does not contain or purport to be, financial promotion(s) of any kind.

Digital assets and related technologies can be extremely complicated. The digital sector has spawned concepts and nomenclature much of which is novel and can be difficult for even technically savvy individuals to thoroughly comprehend. The sector also evolves rapidly.

With increasing media attention on digital assets and related technologies, many of the concepts associated therewith (and the terms used to encapsulate them) are more likely to be encountered outside of the digital space. Although a term may become relatively well-known and in a relatively short timeframe, there is a danger that misunderstandings and misconceptions can take root relating to precisely what the concept behind the given term is.

The purpose of this Blog Post is to provide objective, educational and interesting commentary. This Blog Post is not directed at any particular person or group of persons. Although produced with reasonable care and skill, no representation should be taken as having been given that this Blog Post is an exhaustive analysis of all of the considerations which its subject matter may give rise to. This Blog Post fairly represents the opinions and sentiments of its author at the date of publishing but it should be noted that such opinions and sentiments may be revised from time to time, for example in light of experience and further developments, and the blog post may not necessarily be updated to reflect the same.

Nothing within this Blog Post constitutes investment, legal, tax or other advice. This Blog Post should not be used as the basis for any investment decision(s) which a reader thereof may be considering. Any potential investor in digital assets, even if experienced and affluent, is strongly recommended to seek independent financial advice upon the merits of the same in the context of their own unique circumstances.

© 2019 CoinShares. All rights reserved.


Sign up for our monthly newsletter


Our latest insights & research. Never spam.