Russia Can Increase Leadership in Crypto Mining Industry

Russia Can Increase Leadership in Crypto Mining Industry

According to Intelion Data Systems, a major Russian importer and distributor of mining hardware, Russia has the chance to increase its leadership in the field of crypto mining, against the backdrop of negative developments for the industry elsewhere. The company believes that the country’s share in the Bitcoin hashrate could potentially reach 18%, which will amount to 3.95 GW of electricity consumption with an average cost of 128 billion rubles (almost $1.7 billion). As of January 2022, Russia accounted for nearly 4.7% of the global hashrate, ranking fifth among major mining destinations.

New Restrictions on Access to Low-Cost Energy May Entail Relocation to Russia

The toughening of policies towards the sector in the leading countries can spark another major migration of miners, similar to the one that followed China’s crackdown on the sector in 2021. New restrictions on access to low-cost energy amid rising electricity rates and the introduction of higher taxes may lead to the relocation to Russia of up to 6% of the mining capacities of the United States, Canada, and China as well as about half of the miners from Kazakhstan, the Intelion team projected. In April, the leading Russian mining operator, Bitriver, estimated that Russia has already climbed to second place in terms of total power capacity of the facilities engaged in the extraction of digital currencies.

CEO of Intelion Data Systems, Timofey Semyonov, stated that Russia has every opportunity to change the existing hierarchy of the global crypto mining market. The country has low cost of electricity, reserves of free capacities, and developed energy infrastructure in many regions. Semyonov also highlighted the increased efforts of a number of Russian companies to expand their business as well as government support for the industry.

To create a favorable investment climate for mining in Russia, the experts from Intelion believe that mining must become a “legal business activity with clear rules of the game.” They think that the crisis in the banking sector in the U.S. and Europe will lead to a growing demand for bitcoin as a hedging tool and interest in crypto among traditional financial institutions, resulting in increasing global mining volumes.

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