Courtesy Everett Collection
Perhaps the Pelican State should rename itself the Bitcoin State.
According to a new analysis compiled by the Crescent Electric Supply Company, Louisiana could be the most appealing state in the country, based on one unusual metric.
Why? It’s cheaper to mine bitcoin there than in any other state in the U.S., based on the different electricity rates in different regions of the country.
Mining a single bitcoin costs $3,224 in Louisiana, a relative bargain considering the digital currency /zigman2/quotes/31322028/realtime BTCUSD +0.36% last traded at $17,652.30, up 6.8% on the day, which brings its year-to-date rise to a massive 1,723%.
The most expensive state, in contrast, is Hawaii, where the cost of electricity brings mining costs up to $9,483, meaning it is nearly three times more expensive to mine bitcoin in Honolulu than New Orleans.
Courtesy the Crescent Electric Supply Company
So-called miners perform a crucial function within the blockchain, or the decentralized ledger technology that underpins all crryptocurrencies, by solving complex computational problems to validate transactions on the network, In exchange for this function, which powers the blockchain, miners are rewarded with bitcoins.
Mining is a very energy-intensive process; by one estimate, bitcoin requires 215 kilowatt-hours of energy for each transaction. According to Morgan Stanley data, the total energy consumption of the bitcoin network consumes as much electricity as 2 million U.S. homes.
Chart courtesy Morgan Stanley
Mining becomes a magnitude more difficult and energy-draining the closer miners get the 21 million maximum number of bitcoin that will ever exist, a level that is calculated to be reached in 2140. Presently, the number of bitcoins in existence is roughly about 16.8 million since the first block of bitcoin was mined March 2009.
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