After choosing the right Bitcoin mining machine, the next thing you need to think about is where to place the mining machine. Below are some important points to consider when choosing the best place to mine Bitcoin.
1. Low electricity costs
Bitcoin mining uses a large amount of electricity. As explained in " (5) How to Choose and Buy a Mining Machine ", if you operate a mining machine in a place with high electricity costs, you will incur high electricity costs even with the same hash rate (computing power).
Not only that, but if you manage and operate the mining machine in an area with low electricity costs, you can extend the economic life of the mining machine.
Needless to say, Bitcoin will be mined in countries and regions where electricity is particularly cheap (for details, see " (8) Which countries have cheap electricity? "). However, even in countries with high electricity costs, places that constantly need spare power (such as factories where the machines need to be kept running (stopping them incurs huge costs) and therefore are always suitable as mining locations.
In addition, with current technology, the cost of large-scale storage of electricity is high, so power companies generate more electricity when demand is high and less when demand is low. For example, electricity is often used for air conditioners during the day in summer, so more electricity is generated, but at night, more people turn off their air conditioners, so the amount of electricity generated is reduced. In such a situation where there is a mismatch between power supply and demand, if the surplus electricity could be used for Bitcoin mining, there would be no "waste."
2. A place with a well-developed electricity infrastructure
Bitcoin miners are concentrated in places where electricity is cheap, but in places where the power infrastructure is not well developed, the miners' large amounts of electricity use can cause power supplies to become strained. This can become a political issue, and ultimately lead to problems such as taxing Bitcoin mining or applying a different fee system to Bitcoin mining, so caution is required.
3. Cold places
The semiconductor chips in Bitcoin mining machines generate a lot of heat. If these semiconductor chips are not cooled, not only will their computing power decrease, but they will also become more susceptible to damage.
Many of the current mining machines are air-cooled, so it is important to install them in places with low temperatures. In cold places, it is very advantageous to reduce cooling costs. There are also cases where the heat generated by mining machines is reused in cold places. In the place where we operate our mining machines, the hot air generated by the mining machines was guided to a greenhouse to grow fruits and flowers.
Furthermore, from the perspective of the efficiency of the ASIC that performs the calculations during mining, it is said that if the ASIC is properly cooled, its performance will improve.
(Recently, water-cooled mining machines and dedicated oil-immersion cooling equipment have begun to be used, so mining does not necessarily have to be done in cold places. In particular, oil-immersion cooling not only greatly improves the performance of the mining machine, but also extends its life, so it is likely to become more common in the future.)
4. Internet connection
Bitcoin mining, of course, requires an internet connection, so having a location with stable, high-speed internet is essential for efficient mining.
5. Laws, Regulations and Policies
Bitcoin mining is restricted in some places by laws and regulations. For example, in Kazakhstan, where electricity is cheap and the climate is cold, Bitcoin miners were concentrated there for a time. However, Kazakhstan's power infrastructure has not been updated since the Soviet era and is poor, so the miners' use of large amounts of electricity caused the power supply to become strained and even led to frequent power outages. Eventually, Bitcoin mining became a political issue, and problems arose such as taxing Bitcoin mining in exchange for legalizing it, applying a different fee system to Bitcoin mining, and in some places only allowing mining on weekends when electricity is not tight.
In the end, the cost of legally mining Bitcoin in Kazakhstan has risen, so now many mining farms are mining illegally by paying bribes, etc. Placing mining machines at such illegal mining farms is risky, as you never know when you will be investigated by the authorities, and you will be investigated as soon as the bribed bureaucrats leave, and it lacks stability.
6. The level of facilities and service of the mining farm (data center)
Of course, it is important that the mining farm (data center) where the mining machines are located and operated has a solid power supply and Internet connection, but in addition to that, you need to check the completeness of the facilities, such as whether the heat emitted by the mining machines is properly exhausted, whether there are security measures such as surveillance cameras, barbed wire, and 24-hour security guards, and whether dust prevention measures are in place.
7. Urbanity
It is also important to mine in a relatively urban location where you can hire staff to repair mining machines and manage the farm. In particular, operating a large-scale mining farm requires securing human resources such as electricians, Internet-related engineers, and mining machine repair engineers. We are sometimes introduced to mining farms in countries where electricity is extremely cheap, but if there is no city nearby where we can secure human resources, it is difficult to operate the mining farm itself for the long term, so we tend to pass on them.
8. You can actually go and see where the mining machines are located
In order to properly manage and monitor the mining farms that manage and operate the mining machines, it is important to choose a location that you can actually visit. If the farms are managed by a specific company or are located in inaccessible locations for safety reasons, you may not be able to see the mining machines in an emergency, so we try to avoid such locations. We place particular importance on this point and make sure to regularly visit mining locations.
9. Public Safety
Since bitcoin mining is a task that produces valuable "money," operating in areas with poor security risks the risk of mining machines being stolen. Also, as mentioned above in "(h) Ability to actually visit the location where the mining machines are located," we place importance on actually visiting the mining machines to manage and monitor them, so for our own safety we try to avoid areas with poor security.
10. Prices
In regions with high prices, the costs of building and operating mining farms and repairing machines are also high. Therefore, care must be taken when managing and operating mining machines in countries or regions with high prices (such as Northern Europe).
Conclusion
It is not enough to simply have a "cold place with low electricity costs" to be suitable for mining. In addition to this, the location of mining is ultimately decided based on the character of the company that will manage and operate it.