Undeterred by upcoming federal restrictions on Bitcoin, regional authorities in Moscow have announced intentions to attract European mining companies and investors. Cheap electricity and developed infrastructure will provide the incentives and more than 150 mining farms in the metro area are taking advantage of them already. A Russian company plans to set up one of the largest mining facilities in Europe and is now offering a token to finance the project.
Also read: Hong Kong Company Set to Build Crypto Mining Farm and Museum on Russian Island
Russia’s Trump Card – Cheap Energy
“Electricity is cheaper here. European miners are ready to relocate to Russia”, a city parliament member said, speaking to journalists last week. “The regional infrastructure is well developed. Miners can either buy electric power from the public network, or install their own gas-turbine generators”, added Igor Kohaniy, chairman of the Moscow’s Construction and Energy Commission.
“Crypto businesses and the Bitcoin community supported the initiative. According to the Russian Cryptocurrency and Blockchain Association, the capital city has the highest potential to lure “mining tourists”, Bitsmedia reported. The conclusion came from a nationwide study that assessed electricity rates, power reserves, logistical accessibility and telecom infrastructure in Russia’s regions. Moscow Oblast (the adjacent district) placed second, followed by Saint Petersburg.
“Investors do not come empty-handed. They are building mining farms and local entrepreneurs will also benefit. The energy costs are lower here – why not play the trump card”, said Vladimir Zhuk, deputy head of the city’s Economy and Investment Committee. He also stated that attracting crypto-tourists is a smart policy and suggested that authorities should advertise what the region has to offer. “We have Russian miners operating here and they can confirm – this is a good place to run a business like that”, Zhuk added.
The Kremlin Deals the Cards in Moscow
However, not everyone in power shares the same upbeat mood about crypto-tourism in Russia. Federal authorities are drafting a law that will certainly impose restrictions on mining farms, payments and token sales. President Putin has set a deadline for the finance ministry and the central bank to submit their framework proposal for the new regulatory regime. It should be finalized by the end of this month and implemented by the summer of next year.
Doing business, especially Bitcoin-related, takes a lot of optimism, willingness to embrace risk, and some survival skills. And in Russia, it takes Russians to win any such war. Bitferry is a company run by Russians with years of experience in the harsh, often freezing cold, business climate of their homeland. It launched its first mining operations in May 2017 with two farms in the Moscow area. Its hardware-savvy team recently announced a plan to build one of the largest mining platforms in Europe. They claim Russia’s severe weather conditions actually benefit mining, allowing for energy-efficient cooling solutions. A price of less than 5 cents per kWh of electricity should also keep the costs down.
Small Investors Wanted for Large Mining Farms
Great ideas and ambitious plans do not necessarily find substantial financial support. But Bitferry is not going after big capital anyway. The company is targeting smaller investors and offers in return to set them up with a portfolio of different miners. The feature opens the door to maximizing profits in a sustainable way and investors are not tied to a single mining project or a coin.
Bitferry’s coin offering started with pre-sales in November at discounted prices. Investors can still buy tokens if they want to be part of building “one of the biggest industrial cryptocurrency mining farms”.
What do you think of Moscow undermining federal policies and trying to attract investors from Europe? Will the Russian government crack down on these mining farms? Let us know in the comments below.
Images courtesy of Shutterstock.
Want to create your own secure cold storage paper wallet? Check our tools section.