Bitcoin mining is in an attractive way to get bitcoins for those looking to get in on the cryptocurrency craze. But it is not cheap. Numerous reports have documented the skyrocketing energy costs required for mining. (See also: Do Bitcoin Mining Energy Costs Influence Its Price?

A report by Crescent Electric Supply Co. has a different take on the matter. The report ranks the five best and worst states for mining, based on costs. With an average cost of $3,224 per bitcoin, Louisiana is the cheapest state for bitcoin mining. Idaho, Washington, and Tennessee are next three cheapest states, and Arkansas – which boasts average costs of $3,505 per bitcoin – rounds out the top five.

Meanwhile, New Hampshire, Massachusetts, Connecticut, Alaska, and Hawaii bring up the rear of the list. In fact, Hawaii has average costs of $9,483 per bitcoin. Given that the price of a single bitcoin has shot up by more than 800 percent over the past one year, those costs might still result in a tidy profit.

As of this writing, a single bitcoin was trading at $10,488.38. 

A Case Of Energy Costs? 

Energy is said to comprise more than 90 percent of overall costs for bitcoin mining and that seems to have been the basis for Crescent Energy’s estimates as well.

According to EIA data, Louisiana was the nation’s highest energy consumer but paid significantly lower rates as compared to the national average. In contrast, Massachusetts has a low per capita energy consumption as compared to other states due to its energy efficiency programs. This has resulted in high electricity rates of 20.43 cents per kWh as compared to the national average of 13.30 cents per kWh.

Washington and Hawaii offer similar contrasts. While the Pacific Northwest state has low consumption and electric rates, Hawaii has average rates of 29.03 cents per kWh. Washington has been quick to capitalize on its attractiveness as a destination for bitcoin miners and raised electricity rates for bitcoin miners at the start of 2017. 

Those costs, however, pale in comparison to the costs in Iceland, where Genesis Mining – a bitcoin mining outfit – has set up shop. In a 2015 interview, Genesis disclosed that it cost them $60 to mine a single bitcoin.

China, which accounts for a majority of bitcoin supply, has many mining entrepreneurs located in Sichuan, a province where hydropower is cheap and plentiful. It is likely that bitcoin mining costs are also fairly cheap there. (See also: Is Bitcoin Mining Still Profitable?)   

Or Maybe Not

In the meanwhile, researchers and economists have begun calling into question the data points for bitcoin’s estimated energy consumption. Jonathan Koomey, a researcher and lecturer at Stanford University, told CNBC last December that “wild extrapolations” could have real-world consequences. “I would not bet anything on the bitcoin thing driving total electricity demand. It is a tiny, tiny part of all data center electricity use,” he said.

Christian Catalini, a professor at the MIT Sloan School of Management, said it was not possible to make credible claims about energy use “without actual data from miners.” 

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.001 bitcoin.

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