Experts: This Is Why Russia Is Becoming a ‘Crypto Mining Hotspot’
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Experts have explained why Russia is reportedly becoming a crypto mining hotspot, as the nation claims its crypto mining hashrate is second only to that of the USA.
Per Finam, Nikita Zuborev, a Senior Analyst at the domestic crypto platform BestChange, said:
“There are many advantages [of mining crypto in Russia]. These include relatively low electricity tariffs. Even in Central Russia, prices are competitive relative to the rest of the world. But if we talk about regions with even lower tariffs, such as the Irkutsk and Krasnoyarsk regions, Khakassia, and Dagestan, then the benefits are much higher.”
Zuborev added that some regions of the nation had surplus energy reserves that could be made available to miners on “favorable terms.”
The expert also said that “relatively” low taxes on company profits were also attractive for many mining firms.
And Zuborev said that another “minor, but still noticeable” plus for Russia was its proximity to China, the “absolute leader” in the production of crypto mining equipment.
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Is Russia Really the World’s Second-biggest Crypto Mining Power?
The most recent Cambridge Centre for Alternative Finance Bitcoin electricity consumption index (January 2022) projected the average Russian monthly hashrate at less than 5% of the global total.
The United States, meanwhile, posted almost 38%, with Russian neighbors Kazakhstan and China on over 13% and 21% respectively.
The University of Cambridge global bitcoin electricity consumption index, updated in January 2022. Darker colors indicate higher levels of consumption. Source: (Cambridge Centre for Alternative Finance)
But according to Komersant, the Russian mining giant BitRiver believes the nation actually has some 1GW worth of crypto mining capacity at its disposal.
It claimed that the USA has some 3-4 GW worth of mining power, but that regulatory changes in Kazakhstan last year (due to massive electricity shortages in late 2021) and a 2021 Chinese crackdown on mining have helped Russia eclipse its neighbors in Bitcoin and altcoin hashrates.
No other nation has more than 0.5GW at its disposal, BitRiver claimed.
The Gulf States have a combined 700MW, while Canada has 400MW, the mining firm said.
Furthermore, the crypto mining firm claimed, the United States’ position at the top of the mining tree could be under threat.
The BitRiver CEO Igor Runets said the American mining industry is being “slowed down” by a mix of rising US electricity prices, declining mining profitability, and the abolition of tax incentives
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