Why Russia is benefiting from the great migration of Chinese Bitcoin miners

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It’s been less than six months since China’s May 2021 crackdown on bitcoin mining, resulting in the biggest upheaval in the network’s history.

According to the Center for Alternative Finance (CFAF) at the University of Cambridge, since May, the United States has climbed to the top spot in bitcoin mining with 35% of the global hashrate, while China has risen from 45% to zero.

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Although Kazakhstan is currently in second place with 18% of network mining, the small country is running out of energy and has asked the mining sector to reduce its consumption to a total of 100MW, giving each farm 1MW. over two years.

That leaves Russia to come in quickly with 11% of the grid hash, down from 7%, and likely bypass Kazakhstan at some point, as its northern Siberian region has copious amounts of hydroelectric power stranded, much like the now abandoned mining area of ​​Xinjiang. , China.

Why Russia is a natural mining destination

When it comes to proof-of-work mining, there’s nowhere better suited than the Siberian region of Irkutsk in Russia, where most of the mining activity in Russia takes place. Its abundance of stranded hydroelectric power (estimates are only 20% used currently) makes it a top destination for environmentally conscious miners.

The climate could not be more ideal – cooling a large number of ASICs is a growing challenge for the industry with larger operations considering immersion cooling to compensate for the heat generated by operating so many. ‘computers in the same place. Large amounts of stranded power, mainly hydroelectric dams, are unused and remain vestiges of the industrialization campaign of the Soviet Union in the 1920s. They still produce power, but there is no market close enough to benefit from it. The Russian government has welcomed miners despite their ban on bitcoin as a currency. Bitriver Mining

In a recent statement, bitcoin miner Bitriver, headquartered in Zug, Switzerland with offices in Moscow, which currently operates a mine in the Irkutsk region of Siberia, said:

Russian authorities have attributed a massive increase in retail energy consumption to crackdowns in China and an increase in underground cryptocurrency mining operations that take advantage of cheap retail electricity in some areas while overloading the regional network, thus increasing the risk of accidents and emergencies. “

BitRiver, Russia’s largest mining company, provides hosting service and equipment at its flagship 100 MW data center in the city of Bratsk, as well as other smaller sites, for mining companies in the United States. United, Europe and Japan wishing to take advantage of the region’s good market. energy.

Bitriver has abundant and cheap green energy

Bitriver is committed to only using green energy mining and states in its press release:

“BitRiver is the world’s largest colocation service provider for green cryptocurrency mining. It uses renewable energy to power around 90% of its colocation facilities located in the Siberian region. “

Siberia has gigawatts of surplus hydroelectric power from huge hydroelectric power plants that were among the largest in the world when they were built (in Soviet times).

Russia is also the second country in the world in terms of hydropower potential, but only 20% of this potential is developed (Russia still accounts for over 9% of global hydropower production and most of it comes from the Siberian region).

Asked about the collaboration with Russian authorities, BitRiver CEO Igor Runets commented:

“Bitriver fully supports this new government effort because it believes these efforts could serve as a springboard for sound regulation.”

“The government has continued to embrace and regulate cryptocurrency mining. As a result, mining operations provide co-location services for miners around the world instead of mining for themselves. This further positions Russia as a great place for anyone in the world to welcome their miners. “

The current legislation in Russia does not bother us in any way, “Runets said.” It allows us to host computer equipment of foreign customers on Russian territory with regulations for this in dollars or rubles. “

As stated on Bitriver’s website:

“We buy electricity at wholesale prices. We actively cooperate with the administration of the city of Bratsk and contribute to the development of the city. We also pay all of our taxes owed.

Runets is happy to participate in a new wave of mining in Russia. In his press release, he noted:

“Legitimate mining operations are racking up industrial electricity rates that are up to three times the retail electricity rates in Siberian regions of Russia. Such operations generate highly qualified jobs and attract foreign investment, contributing to the development of local economies.

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