- Ukrainian miners’ energy consumption could match the needs of 770 hospitals by April 2024.
- Low electricity tariffs make cryptocurrency mining profitable in Ukraine, despite potential power outages and attacks.
- Mining poses a significant threat to Ukraine’s energy stability, consuming up to 6.7% of the total energy in March 2024.
- 1 BTC mining in Ukraine costs significantly less compared to Europe or the USA, but it equates to the energy consumption of an average household for 36 years.
- Potential for critical energy shortages due to the mining sector’s load on the system, especially amid generation deficits and attack threats.
Experts Analyzed the Threat of Mining to Ukraine’s Energy Sector
Cryptocurrency mining in Ukraine is becoming increasingly significant, with energy consumption matching the needs of 770 hospitals by April 2024, according to a report by Molfar. Despite the relatively low electricity tariffs that make mining profitable even under adverse conditions, the sector’s energy demands pose substantial risks to the country’s energy stability.
Energy Consumption Analysis
The report highlights that there is no official data on the number of miners or the hash rate in Ukraine. Molfar’s analysts used data on unique users and traffic from July 2023 to June 2024 to estimate these figures. They considered three active mining pools with a combined consumption of around 33 kWh.
To provide a comprehensive analysis, the report assumed three scenarios: 100%, 50%, and 10% of the visitors to these mining pool websites being active miners. Depending on the scenario, energy consumption levels varied significantly, peaking in March 2024:
- 100% scenario: 2026.6 MWh
- 50% scenario: 1013.3 MWh
- 10% scenario: 202.7 MWh
Comparative Energy Consumption
If all visitors to these mining pools were miners, the energy consumption would be on par with community needs and significantly lower than the household sector. The report noted that in April and May 2024, Ukrainian miners’ energy use matched or exceeded that of large industrial enterprises.
In March 2024, the mining sector accounted for approximately 6.7% of the country’s total energy consumption. This percentage varied across the scenarios:
- 100% mining: 7.59%
- 50% mining: 3.8%
- 10% mining: 0.76%
Cost and Impact of Mining 1 BTC
Experts highlighted that mining one Bitcoin (BTC) requires about 110,000 kWh. Considering the household electricity tariffs, mining 1 BTC in Ukraine would cost $12,540, which is substantially lower than in Europe or the USA. However, the energy required to mine 1 BTC is equivalent to the consumption of an average household for 36 years.
Broader Implications
Assuming the base scenario where 50% of mining pool visitors are miners, the sector’s energy consumption in April 2024 would equal that of 770 hospitals, 4 million streetlights, or 600,000 air conditioners. The study did not account for illegal miners, suggesting that the sector places a significant load on Ukraine’s energy system. This could lead to critical issues, especially during periods of energy generation deficits and under the threat of new attacks.
The findings underscore the pressing need for Ukraine to balance the benefits of cryptocurrency mining with the imperative of maintaining energy stability. As the sector grows, proactive measures will be essential to mitigate its impact on the national grid and ensure sustainable development.
