Cold & Cheap: Crypto Mining in the U.S.
The simplest equation for maximizing profit in mining cryptocurrencies is finding an area where electricity is cheap and where the mining rigs can run in cool temperatures (cooler temps = more efficiency). There’s a good reason many mining farms are located in inner Mongolia and Greenland for example. But what if you want to start a mining operation in the U.S.? The map below provides a baseline of industrial electricity rates crossed with the annual average temperature by state. Note that these are baseline industrial rates and while some states may have cheap rates, many states such as New York have started to penalize miners.
Looking at the top 10 states ranked by the combination of temperature and electricity (lowest of rate x temp), Montana tops out the list, which may be further supported by open arms from their governor’s office and vacant facilities. However, these are just two variables in what can amount to be a very complex operation as mining farms scale. Other variables to consider are property prices for the farm itself, state incentives, state tax environment, and maintenance capabilities.
The largest variables that remain for the industry as a whole really lies in the future of PoW, compressing margins, and how much miners can expect to make from transaction fees as a coin starts to reach its terminal supply. But for those still considering mining and not quite ready to move to the empty nooks of Mongolia, the US is worth a glance. And perhaps we’ll ideally be able to see a farm powered by sustainable energy so as to offset the obvious power demands of crypto mining.
Disclaimer: I am not a financial advisor, this is not financial advice. These are merely my observations and insights about a market trend.