The cryptocurrency Bitcoin is in the news because of its skyrocketing price among tech investors. Now a new report says those dedicated to “mining” the unregulated digital currency could help curb their costs by locating in Louisiana.
Here’s what you need to know about Bitcoin – it’s a digital currency which is “discovered” by computers crunching lots and lots of numbers. That means those who “mine” the currency need a fairly powerful computer running nearly-constantly, which uses a significant amount of electricity.
Crescent Electric Company studied just how much power miners use, and compared that to utility rates around the U. S. to determine where it’s cheapest to do the work. They found Louisiana had the cheapest rates, where it would cost $3,224 to mine a single Bitcoin.
Compared to the current price of $15,000 per Bitcoin, that seems like a pretty sweet deal. Before dropping the money for an expensive mining rig, though, you should study how cryptocurrencies work and keep in mind just how volatile Bitcoin trading has been: it surged from $1,000 a year ago to $10,000 in November before leaping up to $16,500 and then falling back to $15,000.
Bitcoin is also designed to be more difficult to mine each year. At first, you could mine coins using a home computer. Now there warehouses with tens of thousands of computers mining together to generate new coins. China has 58 percent of the world’s Bitcoin mining power, along with a much cheaper rate of electricity to power such energy-hungry operations.
You also can’t swing a mouse without hitting an op-ed claiming the Bitcoin bubble will burst soon. However, the popularity of Bitcoin (and the appeal of making money by simply investing a computer’s processing power) has led to a rise in popularity of other secondary cryptocurrencies. That means Louisiana could be a crypto-mining destination for some if the practice sticks around longer than any individual currency.