Bitcoin miners harness cheap Siberian energy

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After China banned bitcoin earlier this year, Russia became the second largest bitcoin mining country in the world. Its cold climate creates the ideal conditions for bitcoin platforms to operate at peak performance for long periods of time without sophisticated cooling systems. But in addition to business operations, home mining is also becoming popular in Russia.

According to a report by The Telegraph, more than 14,400 households in Irkutsk, Russia, are mining bitcoin, up from 8,000 last year. The region benefits from the cold and has the lowest energy prices in the country.

“To be honest, I still don’t quite understand how this thing works,” Marina, a 64-year-old bitcoin miner from Irkutsk, told The Telegraph. “The idea that I have money in my account every month warms my retiree heart.”

She said she made thousands of dollars mining bitcoin in an effort to increase her monthly income. Marina earns a state pension of around $ 160 per month.

In Irkutsk, energy prices are set differently depending on their use; industrial activities currently pay about four times as much as households, according to the report. As people set up large mining operations in residential areas, seeking to benefit from even lower electricity costs, the line between home and business energy use is blurred.

“Irkutsk is surrounded by a belt of Bitcoin miners, and they are overloading power lines that are not designed to handle such an amount,” said Oleg Prichko, managing director of Irkutskenergo, the local power company of Irkutsk, according to the report. In the region’s suburbs, dozens of established bitcoin farms are consuming Irkutskenergo’s power at commercial rates.

According to the report, the power company has already filed dozens of lawsuits against suspected minors as chief executive Yevgeny Vlasov compiles data to prove it needs to switch to corporate tariffs.

In October, Russian President Vladimir Putin commented on Bitcoin while addressing the country’s desire to move away from using the US dollar. He said that while Bitcoin has value and a “right” to exist, he does not believe the country can use it in the oil trade. A month later, MPs proposed a bill to legalize bitcoin mining with the aim of reaping a share of the profits from miners.

But earlier this month, Reuters reported that Russia’s central bank was considering making a sweeping move to ban bitcoin completely in the country. The bank has reportedly said that investing in bitcoin could pose risks to the country’s financial stability.

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