Ukraine remains a leading global player in cryptocurrency adoption, even as it grapples with the ongoing conflict with Russia.
A recent report by OSINT agency Molfar reveals the impact of the country’s booming crypto-mining industry on its already strained electricity infrastructure.
As Ukraine faces a severe energy shortage, the surge in electricity consumption due to mining activities adds to the pressure, raising concerns about the balance between economic opportunity and energy sustainability.
The study, covering data from July 2023 to June 2024, highlights how crypto mining is contributing to Ukraine’s electricity deficit.
Despite the challenges posed by high cooling costs in the warmer months and the country’s unstable power grid, Ukraine’s crypto mining industry continues to thrive, potentially playing a pivotal role in shaping the post-war economy.
Electricity consumption by crypto miners
The OSINT report reveals that Ukrainian miners consumed 616 MW of electricity per hour in April 2024, and 487 MW in May.
To put this in context, large industrial operations like steel mills typically use between 200 and 1,000 MW per hour.
In March 2024, cryptocurrency mining peaked, accounting for 6.7% of Ukraine’s total electricity consumption—similar to the energy usage of major industrial enterprises.
Source: Molfar
This surge in consumption comes at a critical time for Ukraine, where energy resources are already stretched thin due to the ongoing conflict and infrastructure damage.
Comparing Ukraine’s crypto mining energy use globally
Although Ukraine’s crypto miners consumed 9 GW of electricity in March 2024, this represents just 10% of the activity seen in the United States, where miners consume between 8 and 10 GW per hour.
The report also notes a drop in energy consumption during the warmer months, as the cost of cooling mining equipment reduces profitability.
This seasonal variation in electricity usage underscores the fluctuating nature of the mining industry in regions with volatile energy costs.
Source: Molfar
Bitcoin mining in Ukraine: costs and profitability
The cost to mine one Bitcoin in Ukraine varies, with the global Bitcoin network requiring approximately 110,000 kWh to produce one BTC.
In Ukraine, this results in an average mining cost of $12,540 per Bitcoin.
With Bitcoin prices hovering around $58,000 as of September 2024, the profitability of mining remains substantial—especially in regions where electricity prices are lower.
However, the energy demands of mining are significant, with miners’ consumption from April to June 2024 equivalent to powering 658 hospitals or 3.5 million streetlights.
Daily energy consumption, estimated at 9,052 MW, could provide nearly four days of uninterrupted electricity supply to cities like Kyiv or Dnipro—highlighting the strain that mining places on an already fragile energy system.
Legal framework for crypto mining in Ukraine
In February 2022, Ukraine passed its law on virtual assets, legalizing cryptocurrency mining under the supervision of the National Securities and Stock Market Commission.
However, as the war with Russia intensifies, Ukraine’s energy system struggles to support large-scale mining operations.
The government is considering regulatory reforms to better manage the sector and address its impact on the country’s power grid.
Looking ahead, analysts believe that with improved legislation and a focus on renewable energy, Ukraine’s crypto-mining industry could become an asset in its post-war recovery.
The country’s low electricity costs and strong interest in cryptocurrencies position it as a potential hub for global mining operations in the future.
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