ENERGY CHALLENGE

Electricity is the main critical factor in Bitcoin mining, not only as an operational input, but as a direct determinant of the profitability, sustainability and competitiveness of any mining operation.


Global Problems to Solve

 

- High energy costs negatively impact the profitability of Bitcoin mining, given that approximately 60% of the cost of Bitcoin mining comes from electricity.


- In many countries (USA, Europe, Asia), energy costs are between 0.07–0.15 USD/kWh, which puts pressure on profitability due to high operating costs, leading to the closure of operations during BTC down cycles.


- In Chile, the energy cost for households is close to 0.3 USD/KWh and for industrialized energy it is around 0.08 USD/KWh.


- Bitcoin is perceived as polluting; digital mining relies heavily on fossil fuels, which is why it has received countless criticisms for its global carbon footprint.


- Let's consider that the Bitcoin blockchain network (approx. 180 Terawatt-hours, TW/h) consumes more energy than many industrialized countries in the world, such as Argentina, Chile, Peru, Switzerland, the Netherlands, Norway, Poland, Finland, Egypt, among others, which underlines the urgency of migrating to clean energy sources.


Investors and funds face technical, regulatory, and management barriers to operating mining efficiently, profitably, and sustainably.


The high geographic concentration of global mining in a few countries (primarily the US, China, and Kazakhstan) creates regulatory, political, and centralization risks for the Bitcoin network. Therefore, it is necessary to diversify mining infrastructure to regions with clean energy, legal stability, and competitive costs, such as Paraguay, Finland, Hong Kong, and Argentina.

 


These problems manifest themselves in several dimensions:

1. Energy costs account for between 50% and 70% of the total cost of mining Bitcoin.

Bitcoin mining is a highly energy-intensive process.

ASIC devices convert electricity into computing power, so every kWh consumed directly impacts utility.

If the cost per kWh is high, the operation quickly becomes unprofitable, especially when:

  • The price of Bitcoin is falling

  • Mining difficulty increases

  • More efficient equipment is appearing on the market

    • In countries where electricity costs between 0.07 and 0.14 USD/kWh, many operations work at the edge of the break-even point.

    2.- Volatility of Energy Prices

    Miners do not control the price of electricity.


    Sudden increases in electricity rates or seasonal restrictions can eliminate profitability overnight.


    This creates an environment of high financial uncertainty.

    3. Regulatory and Environmental Restrictions

    In some countries, Bitcoin mining is:


  • Regulated

  • Limited to certain times

  • Penalized with higher rates for being considered “intensive consumption”


    • Globally, pressure is growing to reduce the sector's carbon footprint, forcing a shift towards renewable sources, often with very high initial investments.

    4.- Global Competition and Energy Efficiency

    Globally, miners are competing for energy efficiency.


    Those who have access to cheaper energy (e.g., hydro in Canada, associated gas in the US, geothermal in Iceland, or solar in desert areas) dominate the grid and maintain higher margins.


    Those who cannot access cheap electricity are simply left out of the market.

    5.- Operational Risk: Downtime

    Variations, interruptions, or poor quality of supply:


  • The miners shut down

  • They reduce the hashrate

  • They generate direct losses

  • They cause ASIC failures due to voltage spikes or drops.


    • A mining operation is only as stable as the stability of its energy source.

    6. Summary to Keep in Mind

    Electricity is at the heart of the problem in Bitcoin mining because it determines:


  • Profitability

  • Scalability

  • Environmental sustainability

  • Operational stability

  • Global competitiveness


    • That's why we miners are looking for energy:

    Cheap

    Stable

    Renewable

    Abundant

    Predictable