China has dominated the bitcoin mining industry for a couple of years, but fears of a government clampdown are signaling now might be the best time to enter the market elsewhere in the world. And someone just made a big bet that Russia, with its cold weather and plentiful fossil fuel energy sources, is the place to establish a mining venture.
Also Read: Big Chinese Bitcoin Miners Are Turning to Canada
Serious Mining in Russia
Power station in Perm, Russia
An investor has acquired a couple of electric power stations in Russia specifically to be used for bitcoin mining, the Russian business daily Kommersant reported. It is purported to be the first time ever someone bought a whole power station for such a venture in the vast and natural resource rich country.
One power station is located in the Perm region, on the western slopes of the Middle Ural Mountains, and the other is located in the nearby Russian Republic of Udmurtia. The two facilities will be used to create a data center and a bitcoin mining farm, the newspaper reported. The deal was completed for an estimated 160 million rubles (worth approximately $2.8 million).
The reported buyer of the power stations, businessman Aleksey Kolesnik, has indirectly confirmed the acquisition. However, he said that cryptocurrency mining operation will only start after the Russian government approves a needed law to make it completely legal. The bill the Russian Ministry of Finance is currently drafting to regulate cryptocurrency and ICOs in Russia is expected to be adopted in March 2018.
Miners Go North
Bitcoin mining farm in Moscow
Chinese miners appear to be preparing for an exodus from their once hospitable homeland. As efficient mining requires cheap electricity and cold weather, locations that offer both are said to be the main benefactors, from Iceland to Canada. But, there are reasons to believe that the Russian government will be more open than others to hosting bitcoin mining operations in their territory.
In December, the Russian Duma hosted a global panel of cryptocurrency miners where people from fifteen countries explained to parliamentarians how cryptocurrencies are created and discussed different approaches to mining regulation. Some Russian politicians also think that bitcoin can help the country bypass Western financial sanctions. Lastly, a common mainstream media criticism of mining at the moment is that it wastes a lot of energy, supposedly exacerbating global warming – an obsession Russia does not share.
Can Russia be the leading new hub for the bitcoin mining industry? Tell us what you think in the comments section below.
Images courtesy of Shutterstock.
Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.