6.5 million Ukrainians own cryptocurrency. By the end of 2023, our citizenshad earned $85 million. Among them are also Ukrainian officials whohold millions of dollars in cryptocurrency. According to theGlobal Crypto Adoption Index report, the number of people investing in mining is growing yearly. However, due to the war and Russian strikes on the energy system, this already risky venture could become unprofitable in Ukraine. This article will examine how various factors impact Ukraine's crypto market and mining. We will explore what is happening with mining due to power outages and whether this truly impacts Ukraine's energy capacity.
How does mining work globally and in Ukraine? Bitcoin mining prices
Despite the Russian invasion, Ukraine ranks among the top ten countries in the world regarding cryptocurrency adoption (that is, how positively people perceive cryptocurrency in general). Approximately 10% of the population owns crypto coins. The cost of mining one Bitcoin is relatively low—about $19,530. In the U.S., for example, by the end of 2022, the cost of mining one Bitcoin was $21,089. In some EU countries, this now costs hundreds of thousands of dollars. These are pre-halving figures, as Bitcoin's "halving" occurred in April 2024. However, even after the halving, Ukraine remains attractive for cryptocurrency investments.
Halving is a process in cryptocurrency blockchains, such as Bitcoin, where the reward for mining a new block is cut in half. It occurs approximately every four years, or after the creation of 210,000 blocks. Halving's main goal is to control inflation and limit the total number of coins in circulation.
On one hand, cryptocurrency mining offers the potential to create new businesses and entire sectors of the economy and attract foreign investors. On the other hand, law enforcement agencies often accuse miners of tax evasion, electricity theft, or even money laundering—sometimes with reason.
In May 2024, Ukrainian law enforcement conducted a joint operation with Europol, arresting three cybercriminals illegally mining cryptocurrency. In September 2022, an underground mining farm operating on the capacities of "Ukrzaliznytsia" was uncovered. In July 2021, the SBU discovered an illegal crypto farm in JSC "Vinnytsiaoblenergo" (in Vinnytsia), where criminals had installed mining equipment.
Although Ukraine passed a digital assets law in February 2022, mining regulation remains in question. Owning crypto coins is legal, but no regulations govern their "mining." Government officials are considering adopting MiCA (Markets in Crypto-Assets) rules to create a transparent crypto-asset market. Implementing such standards would help protect investors, making Ukraine's crypto market more competitive. For now, however, these discussions remain at the parliamentary level.
Nonetheless, cryptocurrency has already shown another side in Ukraine. Since the start of Russia's full-scale invasion of Ukraine in 2022, $225 million has been raised through cryptocurrency donations for the Armed Forces of Ukraine, and this figure continues to grow (1, 2).
What is the hash rate of mining in Ukraine?
Research Methodology: How Analysts Calculated Consumption
Molfar analysts gathered open data from various sources from July 2023 to June 2024 to conduct the mining study. They selected the most popular cryptocurrency, Bitcoin, and used archival information and hash rates from mining pools to calculate the average hash rate by month. They took average values from 146 mining systems, analyzing their hash rate and electricity consumption.
The hash rate is a measure of computational power. Cryptocurrency miners use it to solve cryptographic tasks in the network, such as Bitcoin. The hash rate represents the number of hashes (calculations) performed per second. It is measured in hashes per second (H/s). For example, one megahash (MH/s) equals 1 million hashes per second. In contrast, EH/s (exahashes per second) is a vast unit equal to one quintillion (a number with 18 zeros) hashes per second.
Using Similarweb, analysts identified the number of unique users from Ukraine and assumed they were all engaged in mining. They used average values to determine the hash rate and equipment power to estimate the total involvement of Ukrainians in mining.
It is important to note that there are no exact data on the number of miners in Ukraine. Most people do not currently use mining pools and connect to the network directly. This methodology provides a general overview of the situation based on open data but cannot be entirely accurate.
In Ukraine, three active mining pools with six miners were identified, which likely collectively consumed 33 kW per hour.
A mining pool is a group of miners who combine their computational resources to increase their chances of finding a block and receiving a reward in cryptocurrency, such as Bitcoin. When a pool successfully finds a block, the reward is distributed among all participants according to their share of the computational power.
Molfar analysts selected 15 of the largest BTC mining pools from the website mining pool stats for their calculations.
Pool | Link | Country |
United States | ||
Global | ||
United States | ||
Global | ||
United States | ||
US, EU, Asia | ||
United States | ||
EU, US, RU, CN, IR | ||
US, EU, Asia | ||
US, EU, RU, Asia | ||
CN, EU, US | ||
Hong Kong | ||
EU, Asia | ||
Russia | ||
Europe |
Top 15 mining pools and their countries of origin
To calculate Ukraine's hash rate, Similarweb analyzed the number of unique users and the percentage of Ukrainian traffic from July 2023 to June 2024.
*This statistic is approximate. Molfar analysts based their calculations on the assumption that 50% of unique visitors from Ukraine to mining pool websites are engaged in mining. However, for comparison purposes, they considered all three scenarios—100% traffic, 50%, and 10%.
*The percentages on the chart represent the percentage of visitors to mining pool websites who may be involved in mining. For example, if a site has 1,000 visitors, we assume that 1,000 are mining at 100%, 500 at 50%, and 100 at 10%.
March 2024 has the highest electricity consumption across all three scenarios, especially at 100% (2,026.6 MW/h). This indicates peak activity during this period, which could result from rising cryptocurrency prices or other external factors.
It is worth noting that at the end of March 2024, Russia carried out one of the largest attacks since the beginning of the full-scale war. Power outages were recorded in seven regions: Dnipropetrovsk, Donetsk, Kirovohrad, Odesa, Poltava, Sumy, and Kharkiv. In Odesa alone, 200,000 consumers were left without electricity that day. In the Sumy region, seven settlements were disconnected from the power grid.
Even in the most extensive scenario—100%—electricity consumption by cryptocurrency miners does not exceed that of the residential or industrial sectors.
How much electricity do crypto farms consume in Ukraine?
In March 2024, miners in Ukraine consumed an average of ~1,013 MW per hour, 616 MW in April, and 487 MW in May. For comparison, a steel plant can consume anywhere from 200 to 1,000 MW per hour, depending on production volumes.
In April and May 2024, Ukrainian miners' electricity consumption equaled or exceeded that of large industrial enterprises. This is significant given that cryptocurrency mining is a relatively new industry.
The months with hourly blackouts are marked in red. The graph shows the dynamics of the hash rate (computing speed) in Ukraine in exahashes per second (EH/s) from July 2023 to June 2024.
Mining is the process of using computing power to solve mathematical problems. These solved problems then confirm transactions on the blockchain. As a result, new units of cryptocurrency are created. People either resell this cryptocurrency or store it in wallets.
Mining activity has been increasing since the beginning of the year. In March, consumption peaked at 1,013 MW per hour. These fluctuations could be influenced by the volatility of cryptocurrency prices and electricity problems, which were particularly severe during this period.
According to data from Ukrenergo, Ukraine's total electricity consumption in 2023 was approximately 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 used by miners. However, it's essential to consider how much of the traffic to mining resources is engaged in mining:
- 0.76% if 10% of the traffic is mining,
- 3.8% if 50%,
- 7.59% if 100%.
If we compare this with global figures, the percentage is relatively small. For example, in the United States, miners consumed around 8-10 GW of electricity per hour. Thus, Ukrainian miners' consumption in March 2024 was only 10% of what miners in the U.S. consumed.
Calculating the approximate hash rate allows us to estimate the electricity miners consume. Molfar analysts performed calculations for three scenarios: 10%, 50%, and 100% of traffic engaged in mining. Only 50% of the calculations are presented in the final results for simplicity.
These graphs are interconnected: the more complex the calculations (hash rate), the more electricity is consumed. The peak electricity consumption for miners occurred in March 2024.
From April 2024 onward, electricity consumption began to decline, reaching its lowest level in June 2024, at 377.2 MW per hour, the lowest in a year and a half.
During warmer months, such as June and August, the hash rate and electricity consumption decrease. This happens because cooling costs for mining devices increase, making mining less profitable and reducing the number of active miners.
Comparing Bitcoin Mining to Household Electricity Consumption
The average cost of electricity required to mine one Bitcoin is $46,291. As of early September 2024, its market value is $58,000. As mentioned earlier, expenses and profits differ across regions.
To mine one Bitcoin, about 110,000 kWh of electricity is needed. The total consumption of the Bitcoin network is estimated at 176.02 TWh per year. Therefore, based on consumer electricity prices in Ukraine, the cost to mine one Bitcoin is around $12,540. Of course, this calculation does not account for other expenses, such as equipment and its depreciation.
Here are a few key examples:
Hospitals: In April 2024, at 50% mining activity, the energy consumption was equivalent to the needs of 770 hospitals.
Street lighting: At 50% mining activity in April, energy consumption was comparable to powering more than 4 million streetlights.
Air conditioners: In April, with 50% mining activity, the energy usage was equal to the amount needed to power over 600,000 air conditioners.
From Bitcoin to meme coins: What are Ukrainian miners choosing, and what does Pavel Durov do with it?
The most expensive cryptocurrencies today are Bitcoin and Ethereum. When this material is published, Bitcoin's market capitalization is approximately $1.232 trillion, and Ethereum's is around $315.70 billion.
The top five most popular coins are:
Bitcoin (BTC)
Ethereum (ETH)
Tether (USDT)
Binance Coin (BNB)
Solana (SOL)
There are also so-called meme coins. These are cryptocurrencies that started as jokes or memes. Over time, thanks to their popularity on social media, they gained significant value and a large user base. Here are just a few of them in no particular order:
Dogecoin (DOGE)
Shiba Inu (SHIB)
PepeCoin (PEPE)
SafeMoon (SAFEMOON)
Povel Durev (DUREV)
The cryptocurrency povel durev (DUREV) was created based on the meme about Telegram founder Pavel Durov. Durov himself developed his cryptocurrency TON (Telegram Open Network). He and his team began working on this blockchain platform in 2018. It is among the most popular in Russia and the UAE today (1, 2).
The Ukrainian community has developed several cryptocurrency projects. For example, the Solana blockchain network and its corresponding cryptocurrency, which gained significant popularity in 2021, were created by a team led by Ukrainian-born engineer Anatoly Yakovenko. There is also the cryptocurrency exchange KUNA, which is expanding to other Eastern European countries in Ukraine. The company provides a quick, convenient, and competitive platform to buy and sell cryptocurrency for Ukrainian hryvnia.
Despite the success of many Ukrainian cryptocurrency projects, cryptocurrency circulation in Ukraine remains unregulated. In 2021 the government legalized virtual assets, allowing their exchange and declaration. However, mining is a different area. As a result, the discussion on a bill concerning cryptocurrency taxation is still ongoing in Ukraine.
The Russian invasion and attacks on Ukraine's energy infrastructure have further complicated the situation with crypto mining. At the end of 2021,there were plans to build mining centers around nuclear power plants with a 2-3 GW capacity, but by 2024, these plans seem less feasible. The current state of Ukraine's energy system raises questions about the profitability of this industry. We see that the electricity costs for mining are generally much higher than the energy limits provided to cities like Dnipro and Kyiv. However, miners could theoretically solve this problem using solar or wind power plants.
Another obstacle to mining now is the need for more regulation. The government should establish clear and understandable rules that protect investors and promote the crypto market's development. Regulation would help stabilize cryptocurrency with transparent conditions for all market participants. This is critical to ensure that mining remains profitable for the state and miners and does not threaten the country's energy security.
