Russia now ranks second in terms of energy capacities involved in mining cryptocurrencies, new data suggests. Despite persistent regulatory uncertainty and the negative effects of sanctions, the amount of energy dedicated to the sector has been growing, reaching all-time highs this year.
1 GW of electrical power involved in crypto mining in Russia during the first quarter of 2023
Russia has for the first time climbed to second place in the world in terms of the total power capacity of facilities dedicated to the production of digital currencies. According to data provided by the country’s largest mining operator, Bitriver, the amount of energy involved in minting coins has reached 1 gigawatt (GW) in the first three months of the year.
The United States remains the undisputed leader with 3 to 4 GW of mining capacity, Russian business daily Kommersant reported. The top 10 also includes Gulf countries (700 MW), Canada (400 MW), Malaysia (300 MW), Argentina (135 MW), Iceland (120 MW), Paraguay (100–125 MW), Kazakhstan (100 MW) , and Ireland (90 MW), detailed the newspaper.
Bitriver noted that the positive trend for Russia is related to last year’s reduction in mining activities in Kazakhstan, where authorities shut down licensed mining data centers and went after illegal crypto farms due to electricity shortages. The Central Asian nation’s growing energy deficit has been blamed on an influx of miners following China’s crackdown on the industry. In February, a law came into effect that limits their access to subsidized and low-cost electricity.
The United States also leads in terms of share of the global hashrate. However, the growth of the US market is slowing down due to the increase in electricity rates, the reduction in mining profitability and the abolition of tax incentives in some areas, commented the CEO of Bitriver, Igor Runets, commenting:
Also, the vast majority of the equipment was bought by US miners on credit, so many over-leveraged companies are in bankruptcy or have already gone bankrupt.
The actions of US regulators are also attracting the attention of market participants, added Roman Nekrasov, co-founder of the Encry Foundation, which represents IT companies providing services in the field of blockchain and security. technological innovations. He believes they may spark another big redistribution in the mining market.
Data provided by the head of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (racib), Alexander Brazhnikov, suggests that the energy capacity of Russia’s crypto mining sector may be even greater. Quoted by crypto news outlet Bits.media, he said that the Russians use around 800,000 SO C miners, whose combined nominal power exceeds 2.5 GW.
According to research published in August, the electricity consumption of Russian miners increased 20 times over the course of five years, between 2017 and 2022. The development of the industry in the country is facilitated by the availability of cheap energy resources and climates. fresh in the regions. like Irkutsk. However, its future remains uncertain in the absence of regulations. Moscow’s parliament has yet to pass a bill designed to introduce rules for mining companies.
Do you think the Russian crypto mining sector will continue to grow? Tell us in the comment section below.
image credits: Shutterstock, Pixabay, Wiki Commons, Bitriver
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
