What Is the Relationship between Mining Profitability and Electricity Costs?

Mining profitability is directly and heavily influenced by electricity costs, as the Proof-of-Work process is extremely energy-intensive. Miners calculate their break-even point based on the block reward, transaction fees, and the cost per kilowatt-hour (kWh) of electricity.

Regions with cheap, sustainable power sources are typically the most profitable for large-scale mining operations. High electricity costs can render mining unprofitable, especially for older, less efficient hardware.