The amount of energy required to mine one Bitcoin remains high, increasing costs depending on local electricity prices. On average, mining 1 BTC consumes around 6,400,000 kilowatt-hours (kWh) of electricity. This is equivalent to:

Bitcoin mining has become more energy-intensive over time, particularly after the 2024 halving, which reduced the mining reward and increased competition. This means that cost-efficient electricity is crucial for miners to remain profitable.

Ethiopia’s $1,986 per Bitcoin mining cost is among the lowest in the world, thanks to hydroelectric power and government-controlled energy prices. This makes Ethiopia an attractive destination for Bitcoin miners, especially when compared to countries with high electricity costs.

For context:

Countries like Ireland and Belgium face high Bitcoin mining costs due to several factors:

While Ethiopia offers some of the lowest mining costs, the country may not be fully benefiting from its natural resources.

To maximize benefits, Ethiopia could explore:

While Ethiopia enjoys some of the lowest mining costs, profitability is not just about electricity prices. The global landscape is shifting as miners relocate to cheaper regions.

Ethiopia is one of the most profitable places in the world to mine Bitcoin, thanks to low electricity costs driven by renewable energy sources. However, the country must carefully consider whether its cheap energy policies are truly benefiting its economy.

To maximize national benefits, Ethiopia should consider implementing mining taxes, regulating the industry, and ensuring miners reinvest locally. Otherwise, the country risks missing out on significant economic opportunities while providing ultra-low-cost energy for external Bitcoin profits.

This study used electricity cost data from globalpetrolprices.com (December 2023), as well as mining hardware efficiency data from the CoinWarz Bitcoin calculator. The average mining electricity consumption was calculated using 8 high-performance mining rigs, considering an estimated mining difficulty level of 89,471,664,776,971.