Russia has recently been in the spotlight for its growing crypto mining operations, with some claiming that the country’s crypto mining hashrate is second only to the United States. There are several factors that contribute to Russia’s attractiveness as a crypto mining hub, and experts are eager to share their insights on the matter.
One significant advantage of mining crypto in Russia is the relatively low electricity tariffs, according to Nikita Zuborev, a Senior Analyst at BestChange. In central Russia, prices are competitive compared to the rest of the world. However, regions with even lower tariffs, such as the Irkutsk and Krasnoyarsk regions, Khakassia, and Dagestan, provide even greater benefits.
Russia’s proximity to China, the “absolute leader” in the production of crypto mining equipment, serves as another advantage. Direct rail links between the two nations allow for faster and cheaper delivery of mining hardware. Moreover, some regions of the country have surplus energy reserves available to miners on favorable terms.
However, is Russia really the world’s second-biggest crypto mining power? The Cambridge Centre for Alternative Finance Bitcoin electricity consumption index (January 2022) has projected Russia’s average monthly hashrate at less than 5% of the global total. Comparatively, the United States boasts almost 38%, with Russia’s neighbors Kazakhstan and China accounting for over 13% and 21% respectively.
Despite these findings, the Russian mining giant BitRiver argues that the country has 1GW of crypto mining capacity at its disposal, helped by regulatory changes in Kazakhstan and a 2021 crackdown on mining in China. BitRiver also claims that no other nation has more than 0.5GW of mining capacity.
As for the future of crypto mining in Russia, several industry leaders share their optimism. Ivona Gutovich, the COO of Green Crypto Processing, highlights Russia’s status as one of the largest electricity producers in the world with among the lowest prices. Furthermore, the country’s cold climate provides a cost-saving advantage for cooling mining farms.
Evgeny May, the founder of Cryptonomos, believes that Russia will continue to see interest from investors as regulatory transparency and understanding within the sector improve. As the country’s energy ministry pushes for the legalization of crypto mining and takes action against those funding foreign military forces using cryptocurrencies, it remains to be seen just how much larger the Russian crypto mining industry will grow in the years to come.
Source: Cryptonews
