The industry association representing the Russian crypto industry has launched a project to attract Bitcoin miners. Despite its abundance of cheap energy, Russia now lags behind Kazakhstan, another member of the Eurasian Economic Union, in terms of cryptocurrency production.
The Russian project aims to expand the country’s crypto mining capabilities
The Russian Association of Encryption Industry and Blockchain (Racib) has announced a project aimed at bringing a greater part of the global computing potential for cryptocurrency mining to Russia. Racib pointed out in an announcement that the Russian Federation ranks among the top five in terms of total power generation. In addition, the country’s energy system has unique characteristics that can benefit companies involved in minting digital coins.
Racib lists some of them, including a large overcapacity of 50% in certain areas. Russia’s colder climate is another advantage because it can cool mining equipment at a lower cost, thereby increasing the efficiency of the data center. In addition, the wide availability of traditional fuels and other energy resources, as well as the low population density in many areas, make it possible to deploy large-scale facilities and infrastructure. Raxib emphasized:
All these…provide the best conditions for the formation of professional clusters in the country to support the global cryptocurrency network and the infrastructure of the global digital economy.
The Cryptocurrency Association stated that it will implement the project in close cooperation with Russia’s central and regional authorities and state-owned enterprises. With the participation of the energy industry and public institutions, several working groups have been established. The organization claimed that its main foreign partner in the project is “China’s largest consortium of mining companies.”
As the People’s Republic of China continues to crack down on crypto miners, Racib hopes that some of them will transfer their computing power to the Russian Federation to increase Russia’s share of the global hash rate.
Kazakhstan surpasses Russia as a cryptocurrency mining destination
Environmental issues are considered to be the main motivation for Beijing’s compression of cryptocurrency mining, and Racib believes that Russia has the answer. Environmentally friendly hydropower and nuclear energy account for about 40% of the country’s energy balance. As far as Bitcoin is concerned, Russia’s participation in the migration of miners from China should “provide a more decentralized network format for major digital currencies” and help “avoid re-concentration of mining resources in one area, in this case It’s North America.”
However, Chinese miners have already begun to act, and if Russia wants to attract some of them to its territory, it should hurry up. Other countries have taken advantage of this shift more quickly, including Kazakhstan, another former Soviet republic, and members of the Eurasian Economic Union (EEU) led by Russia.
According to a study conducted by the University of Cambridge, in less than two years, the Central Asian country’s share of global Bitcoin mining has increased by nearly six times, from 1.4% to 8.2%. According to data quoted by RBC (Russia’s major business news portal), Kazakhstan currently ranks third in the world in terms of cryptocurrency mining volume, surpassing Russia, which ranks fourth, with a share of 6.8%.
The report details that during the same period, from September 2019 to April 2021, China’s share fell from 75.5% to 46%, while the United States climbed to second place, with its share increasing from 4.1% to 16.8%. According to research, the Islamic Republic of Iran is now ranked fifth with 4.6%. Nonetheless, Russia still has an opportunity to improve its position, as Kazakhstan has recently imposed a surcharge on the electricity consumed by miners despite the opposition of the local cryptocurrency industry.
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