Kuwait’s Al-Wafrah region experienced a record 55 percent reduction in energy use. This steep fall came after a government-led campaign to shut down any and all illegal crypto mining facilities. This week, authorities raided the government’s estimated 100 homes housing illegal Bitcoin mining rigs. The findings, recently released in a report by the Iraq Ministry of Electricity, are shocking. In a community of the Al-Wafrah region, some households were consuming more than 20 times the electricity usage of an average Kuwaiti home.

Cryptocurrency trading had been illegal in Kuwait historically. The country's interior ministry has now addressed crypto mining, stating that it "constitutes an unlawful exploitation of electrical power … and may cause outages affecting residential, commercial, and service areas, posing a direct threat to public safety."

High profitability allowed mining in Kuwait to become extremely energy-intensive. This was due in large part to the fact that electricity was much cheaper than in most Western countries. No other policies had ever targeted the process of crypto mining in Kuwait, causing the practice to run rampant with no oversight.

"They saw government subsidies, saw the absence of oversight, and saw no laws in place, so they exploited the situation to their benefit" - Saud Al-Zaid

The economics of Bitcoin mining are increasingly unsustainable across the globe. The value proposition of mining Bitcoin dwindled last year when Bitcoin’s halving event reduced mining rewards from 6.25 BTC to 3.125 BTC. The next halving event, expected in 2028, will cut mining rewards even further to 1.5625 BTC.

Mining costs vary considerably across the globe. In the United State, it costs at least $107,000 on average to mine a single Bitcoin. It comes as many US Bitcoin miners are unable to operate at a profit thanks to soaring costs. The effective mining cost in Iran is now much lower ($1,324), while Ireland’s cost is a whopping $321,000.