An industry association representing the Russian crypto sector has started a project to attract Bitcoin miners. Despite its abundant cheap energy sources, Russia is now lagging behind Kazakhstan, another member of the Eurasian Economic Union, in terms of cryptocurrency production.
Russian project aims to expand the country’s crypto mining capacity
The Russian Association for the Crypto Industry and Blockchain (Racib) has unveiled a project to bring more of the global computing potential in cryptocurrency mining to Russia. According to Racib in an announcement, the Russian Federation ranks among the five best nations in terms of total electricity production. In addition, the country’s energy system has unique properties that can benefit companies involved in the minting of digital coins.
Racib has listed a number of them, including the large power generation capacity surplus which is reaching 50% in certain regions. Russia’s colder climate is another benefit as it allows mining equipment to be cooled at low cost, thereby improving data center efficiency. Added to this is the wide availability of traditional fuels and other energy resources as well as the low population density in many areas, which enables the use of large-scale systems and infrastructures. Racib emphasizes:
All of this … provides the best prerequisites for the formation of specialized clusters in the country to support the global cryptocurrency networks and infrastructure of the global digital economy.
The crypto association says it will implement the project in close cooperation with central and regional Russian authorities and state-owned companies. Several working groups have already been set up with the participation of the energy industry and public institutions. The organization claims that its main foreign partner in the project is a “consortium of the largest mining companies in China”.
Amid ongoing crackdown on crypto miners in the People’s Republic, Racib hopes some of them will move their computing power to the Russian Federation to increase Russia’s share of the global hashrate.
Kazakhstan overtakes Russia as a crypto mining destination
Environmental concerns are believed to be a major motive behind Beijing’s pressure on crypto mining, and Racib believes Russia has an answer. Environmentally friendly water and nuclear energy sources make up around 40% of the country’s energy balance. And as for Bitcoin, Russia’s involvement in the miners’ migration from China should “provide a more decentralized network format for the main digital currency” and help “avoid further concentration of mining resources in one region, in this case North America. ”
However, Chinese miners are already on their way, and Russia should hurry if it wants to lure some of them into its territory. Others took advantage of the shift more quickly, including Kazakhstan, another former Soviet republic, and a member of the Russia-led Eurasian Economic Union (EEU).
In less than two years, the Central Asian country has increased its share of global bitcoin extraction by almost six-fold, from 1.4% to 8.2%, according to a study by the University of Cambridge. Kazakhstan is now third in the world in terms of crypto mining volume, as shown by data quoted by RBC (a major Russian business news portal), overtaking Russia, which ranks fourth with 6.8%.
Over the same period, between September 2019 and April 2021, China’s share fell from 75.5% to 46%, while the United States climbed to second place, increasing its share from 4.1% to 16.8% the report says. According to the research, the Islamic Republic of Iran is now in fifth place with 4.6%. Still, Russia has a chance to improve its position as Kazakhstan recently introduced a surcharge on the electricity used by miners, despite opposition from the local crypto industry.
Do you think Russia will be able to pull cryptocurrency miners into its jurisdiction? Do share your thoughts on the matter in the comments below.
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