Key Points
- Ukraine is a leading nation in cryptocurrency adoption, with a significant number of active miners.
- Despite the ongoing conflict with Russia, cryptocurrency mining continues, though it poses challenges to the country’s energy consumption.
Cryptocurrency Mining in Ukraine Amidst Conflict
Despite the ongoing conflict with Russia, Ukraine stands out as a top player in cryptocurrency adoption.
Data collected by OSINT agency Molfar from July 2023 to June 2024 reveals interesting insights into mining activities in the country.
The study identified three active mining pools with six miners in Ukraine, consuming approximately 33 kW per hour.
From the resource asictrade.com, 146 types of miners (mining systems) were identified.
Energy Consumption in Cryptocurrency Mining
The report indicates that Ukrainian miners consumed an average of 616 MW per hour in April and 487 MW per hour in May.
This consumption is comparable to that of large industrial enterprises, despite cryptocurrency mining being a relatively new industry.
In 2023, Ukraine’s total electricity consumption was about 15 GW per hour, with a current deficit of 9 GW.
In March 2024, about 6.7% of the country’s total electricity consumption was consumed by miners.
However, compared to global indicators, this is a small amount. For instance, in the U.S., miners consume about 8-10 GW of electricity per hour.
The hash rate and electricity consumption decrease in warmer months, such as June and August, due to increased cooling costs for mining devices.
Mining one Bitcoin (BTC) requires approximately 110,000 kWh, and the total consumption of the Bitcoin network is estimated at 176.02 TWh per year.
In Ukraine, the cost of one BTC, based on consumer prices, would be $12,540.
Impact on Infrastructure
The study suggests that the average electricity consumption by miners from April to June was equal to the needs of 658 hospitals, 3.5 million units of street lighting, more than 36,000 stores, and over half a million air conditioners.
This level of energy consumption would be enough to supply the largest Ukrainian cities for several days.
Maksym Zrazhevskyi, Head of Research at the OSINT agency Molfar, suggests that miners’ consumption significantly affects the operation of Ukraine’s infrastructure, especially during peak hours.
Legal Status and Future of Crypto in Ukraine
In February 2022, Ukrainian President Volodymyr Zelensky signed the law on virtual assets, with the National Securities and Stock Market Commission to regulate the crypto market.
However, crypto regulation in Ukraine has yet to be fully established.
Since the beginning of the conflict with Russia, cryptocurrencies have become especially popular in Ukraine, including for the collection of donations for the Armed Forces’ needs.
The conflict with Russia has further complicated the situation with cryptocurrency mining.
Despite the challenges, Zrazhevskyi is confident that the country has prospects for mining development.
The passion for cryptocurrencies among Ukrainians, coupled with the low price of electricity, makes the country attractive for mining development.
However, power outages and imperfect legislation pose significant obstacles.
Initiatives are already being considered in Ukraine that will allow for the regulation of the cryptocurrency market in the future, including mining.