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Europe’s Mining Opportunity: Bitcoin Halvening 2020

Insights from some of Europe's top miners on what's next for the industry in light of the 2020 Bitcoin Halvening.



February 16, 2021

In anticipation of the 2020 Bitcoin halvening, currently slated to happen around May 12th, we spoke to several of the top Bitcoin miners and mining pools in Europe to get an overview of how the halvening will impact the industry particularly in Europe.

What is the Bitcoin halvening and why do we care?

The Bitcoin halvening is probably the most important event in the Bitcoin calendar and refers to when the mining reward drops by 50%. This happens after every 210,000 blocks are mined (taking about 4 years).

These drops are drastic, and could put some miners out of business if they can’t keep up with the adjusted earning potential from their operations. However, following the first halvening in 2012 and second in 2016, Bitcoin saw a price jump that has drawn ever more interest to Bitcoin, and subsequently, mining.

Bitcoin mining has been a game for big players for a while now. Only operations with access to the most up-to-date hardware, software and cheaper energy have been able to thrive. And, with the impending “halvening”’ or “halving”, these issues are even more important for miners who want to stay in the game.

With the current chapter of the Bitcoin story about to end and the next one about to start, let’s hand it over to the experts to get their insights.

So, how does the European mining market look now?

Denis Rusinovich, Director of Digital Data Hub GmbH, outlined the main differences in regional mining markets:

‘In general, European miners do operate at a higher tariff bracket (with some exceptions of course). This is definitely higher than China and/or the close neighboring regions of Russia and Central Asia. Also, Europe is losing competition to North America, where we saw positive development over the last 12 months. […]the biggest challenge for miners in Europe is poor local development of the ecosystem in contrast to the USA, where there is efficient development in trading, banking, structured products, and most importantly, financing options for miners’.

But, Alejandro De La Torre, Vice President of Poolin, continued that while European miners do have higher costs than other miners around the world, they also ‘have stable governments, clear or non-threatening regulation and high levels of ease in opening businesses’. These characteristics temper the higher tariffs. And, not only do the regulations streamline business operations, but European countries can also come with more safety nets.

As Thomas Heller, the Global Business Director of F2Pool, told us, ‘[h]igher electricity prices are offset by smoother business, better regulation and more protection, even things like getting insurance’.

Philip Salter, Head of Operations at Genesis Mining, agrees saying that the ‘popular belief’ in higher mining costs in Europe is ‘not necessarily [true]. It depends. Political stability, reduced risks, and most of all electricity coming from renewable sources make it in the end the best (aka cheapest) option’.

So, while the general consensus among our contributors is that the ticket price for mining may be higher in Europe, greater political stability and breaks for using renewable energy sources can balance this cost. However, Europe has been lagging behind other countries, probably for the reasons Rusinovich gave, or a lack of integration of the mining ecosystem into other economic systems and financing options.

What effect is the halvening expected to have on European mining?

Because halvenings are ‘predefined trigger event[s]’ as Rusinovich puts it, preparation is scheduled. As such, miners around the world have all been preparing by ‘[s]ourcing cheaper electricity, buying new more efficient hardware and hedging financially for the upcoming risk’, as de la Torre summed it up.

And, according to de la Torre, Europe’s association with a higher tariff bracket better prepares miners for the coming halvening. As de la Torre puts it:

‘I feel miners in Europe will be relatively better off than other mining regions on the globe, simply because miners in Europe have needed to be more efficient for a longer time. Mining farms in Europe have, on average, higher electrical costs so they tend to upgrade quickly, use firmware that is more efficient and generally have better engineered data centers to take advantage of local weather. These reasons could lead European mining farms to fare better in the upcoming halving’.

But, while de la Torre is optimistic about the outlook of European mining in the face of the halvening, Rusinovich has a more metered view. While ‘[m]iners in Europe were some of the earlier scalable operators, with developments in Iceland, Norway and Sweden in 2016–17[…] new regions with lower electricity tariffs [have become] available since then. And, the upcoming halving will put more pressure on margins for existing hosting operators in the region and their mining clients’.

Rusinovich continues that these ‘higher tariffs’ mean these regions will be ‘unlikely to see any new investment into new generations of hardware coming in’, some of the most important steps in making sure that mining operations remain profitable. He believes that ‘overall we should see the European share of global hashrate decreasing (with exceptions of some Eastern European locations)’.

And, Salter predicts that the halvening ‘should impact all farms around the globe the same. Operating costs will be more important than before, so the miners that use cheap, renewable power sources will come out on top’!

Despite the predictability of when the halvenings will occur, the outcome is clearly less predictable. But, while there is some debate on the exact impact that the halvening will have on the global distribution of miners, one thing that is clear, is that decentralisation across the globe is important for all parts of Bitcoin if it is to remain secure.

Why is it important to keep a thriving crypto mining industry in Europe?

One of Bitcoin’s main selling points is its decentralisation. The ability to cut out intermediaries and gatekeepers secures this system against government control or corporate monopoly. In order to ensure that Bitcoin remains ‘the only genuinely decentralized PoW virtual currency’, as Rusinovich pointed out, it’s necessary to protect that. And that includes the location and backings behind miners.

Salter expanded this by saying:

‘No one knows exactly how much of the global hashrate originates from China, but it would be great to have other continents gear up. Bitcoin shouldn’t have a central location for mining. It’s like having all eggs in one basket, simply put. China is known for rash and authoritarian decisions, which means a lot of uncertainty for anyone who wants to run a stable business, and also for the entire Bitcoin ecosystem’.

De la Torre followed this up, saying ‘having more balance in the international scene in this industry can offset some risks that may occur when all activities are concentrated in one or very few regions’.

And, as with any industry, fostering a friendly environment can stimulate the economy. As de la Torre put it, ‘[j]ust like every other industry out there, they create jobs’, giving European governments a vested interest in welcoming mining. Rusinovich followed this up, by saying that ‘it is strategically important to continue development of infrastructure business (and bitcoin mining is an infrastructure, and here we are only talking about large/industrial scale operations)’.

‘Europe has stricter regulations when it comes to protecting the environment and employees’ than many other countries located in Asia and North America, providing broader global incentives to expand mining operations here. ‘So mining farms in Europe are cleaner [and] greener’, giving the European market not only an edge, but also an argument for moving a greater percentage of the mining operations to Europe.

What developments are forthcoming or should be encouraged?

While preparation for the halvening should have already spurred many of the developments and updates to mining systems, the after effects of this preparation and changes to the mining landscape should still have implications. Additionally, as Bitcoin continues to cement itself as a viable financial instrument, major events, such as halvenings are garnering more attention.

The 2020 halvening may be the most followed Bitcoin event to date. And, as this relates so much to miners, they are likely to see a surge in interest. According to Rusinovich, this is much needed as the ‘mining sector is neglected in terms of attention and understanding’.

He continues that he does not so much ‘“expect” but “would like” for [miners] to get more visibility and awareness as an important part of the digital assets ecosystem’. These hopes mirror many other major players in Bitcoin, especially as this halvening is expected to kick some miners out of the game. As an important part of the Bitcoin ecosystem, miners who can no longer compete need to be accepted into the community as active members.

De la Torre is similarly looking forward to ‘the burgeoning of new services around the mining sector [and] many new opportunities to provide products and services for miners’.

And, while greater services for miners as an important part of the Bitcoin ecosystem seems to be at the forefront of many people’s mine, also important in this halvening is the use of green energy. Salter continues to stress that Europe’s ‘renewable power sources’ will be what place it in ‘competition with the mining facilities in China’.

Rusinovich similarly notes upcoming advances in how energy is sourced and used, saying ‘I would like to see more initiatives and developments in modular container-type solutions in locations that have excess capacity of electricity to be utilized with acceptable tariff levels’.

Developing greener energy sources requires a closer relation between governments and miners to facilitate better and smarter energy use. As Salter told us, ‘[g]enerally, we need governments to understand the mining industry’! And, a large part of understanding comes from involvement, which more countries may be considering as Bitcoin’s success continues.

So, should governments of enterprises in Europe look into Bitcoin mining for sovereignty or geopolitical reasons?

To this, Salter told us ‘absolutely’! However, he tempered that by adding that it ‘needs to be clear to any government (or any other large institution that this won’t give them any influence over the market’. Rather, ‘[t]he more big players start mining, the more decentralized, secure and fault resistant Bitcoin becomes’.

Despite this last caveat, Rusinovich warns that ‘in the coming 12–24 months we might see more engagements of some states in scaling up their regional share of hashrate and trying to build control over trading flows, either only regional or more global’. Whether these attempts will pan out, or merely lead to the greater decentralisation that Salter promotes, remains to be seen.

None-the-less, all of our contributors seemed to think that as the market becomes increasingly difficult for governments to discount, that it ‘is always prudent to take a step, no matter how small, to the possibility of [B]itcoin staying viable for many years to come’, as de la Torre put it.

And, Heller followed this up, by saying that ‘[a]s a government, you don’t want to not be at the table if things really progress and move forward. It doesn’t mean they have to have a huge interest in Bitcoin mining’. And certain countries that have embraced mining interest have seen payouts. For example, Heller told us that when Kazakhstan started to see a lot of interest from large mining operations, ‘it was a win-win, because for Kazakhstan, the government, it attracted a lot of investment’, including contributing to ‘development in terms of the power stations, the generators and everything’.

Clearly, there are benefits to countries who embrace expansion in this industry. But, beyond a monetary benefit, Rusinovich recommended ‘the government probably should get its own deployment in order to build a knowledge base about this sector’ — a step which appears increasingly important as smarter regulations need to come into play.

This much anticipated event is already predictably leading to changes — namely better software, hardware, and cheaper energy. However, with the increased attention on this halvening, Bitcoin could not only gain interest from individuals, but potentially governments and large enterprises. Ideally the increased attention will also lead to greater decentralisation in mining distribution and acceptance that allows miners to work with governments and energy suppliers to use the cleanest energy, along with more efficient hardware.

Thank you to our four contributors! We hope this article made the state of European mining clear.

If you have any feedback, or just want to get in touch, please reach out at or on Twitter.

Maggie is a writer, researcher, and editor. Trained in literature, critical theory, and gender studies, they are now exploring the ways that technology is changing the landscape of human interaction.