At the current levels of mining difficulty, Bitcoin price, and network activity it will require approximately 180,349 Kilowatt Hours (kWh) to mine one whole Bitcoin. Energy prices in Ireland are approximately 0.31c per kWh, meaning it will cost miners €55,908 in electricity costs per Bitcoin mined and that is before you buy your mining rig.
For my calculation, I have assumed that the mining rig used produces a TH/s (Hash Rate per second) of 100 and requires 3,050 Kilowatt hours to run. These are the specifications of the Antminer S19j Pro is one of the more efficient ASIC Miners and costs around $3,000-$4,000.
Why Bitcoin Mining is unprofitable in Ireland
The profitability of Bitcoin mining in Ireland is not helped by the current Bitcoin price which at the time of writing is $19,792. To give this a bit of context in November 2021 the Bitcoin price reached $67,567.
The biggest reason for Ireland being such a difficult place to mine Bitcoin is our energy prices. Ireland lacks its own pool of natural resources and has to import the majority of all the oil and gas we need to run our networks.
According to Bonkers.ie, the 24-hour rate per kWh offered by Electric Ireland is 31.30 cents. This is why it is often that we seen that Bitcoin mining is predominately carried out in nations with low energy costs such as China and the United States.
Before you even start mining, you also have to take into account the upfront cost of buying a GPU, which can set you back a couple of thousand euros.
You can calculate your daily income and energy costs using this calculator. Just mining with one ASIC (at the current Bitcoin price, network activity and mining difficulty) will produce the following rewards:
Using one GPU you can mine up to 0.0040588 BTC per day, at this rate it will take you 2,464 days (6.75 years) to mine one whole Bitcoin.
As you can see from the image above, you would lose $5,347 over the space of a year at the current Bitcoin price, and energy price levels. If you wanted to start a large Bitcoin mining operation, you would need 2,464 GPUs to mine one whole Bitcoin in a single day.
Taxation of Income Earned from Bitcoin Mining
Even in a situation where you make a profit from mining Bitcoin in Ireland, you will then have additional costs you must factor in such as taxation and accounting fees if you do not have the expertise to do this yourself.
If you are not set up as a limited company, then all profits you make from your mining activities will be subject to income tax (PAYE, PRSI and USC). Ireland has a progressive tax system and the marginal tax rate increases the more you earn and tops out at 52% for any income earned above €70k.
When you later dispose of the Bitcoin you earned through mining you will also have to pay Capital Gains Tax on the profits made (difference between the price at the time of mining and the time of disposal). The CGT rate in Ireland is currently 33%.
If you want to read more on how cryptocurrency is taxed in Ireland then you can check out my guide here.
Disclaimer: This blog post is for informational and educational purposes only and should not be construed as financial advice