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The power needs of cryptocurrency miners in Russia have grown significantly since 2017, with electrical energy consumption seeing a 20-fold increase over the five-year period. In 2021, the coin of the coin with the largest market capitalization, Bitcoin, claimed 1.25 gigawatts in the country. However, experts say that Russia has spare capacity to meet much greater demand.
Electricity consumption in Russia’s crypto mining industry has steadily increased since 2017, a new study has established. The positive trend led to an annual increase of at least 150%, according to specialists working for mining hardware importer Intelion Data Systems.
The extraction of Bitcoin (BTC) alone needed 1.25 gigawatts of energy in 2021, their calculations show. The volume of electricity used for the production of other major cryptocurrencies, such as ether (ETH) and Litecoin (LTC), could be another 40-50% of BTC’s consumption, the researchers say.
Various government institutions estimate that cryptocurrency mining accounts for between 0.64% and 2% of total electricity consumption in the Russian Federation, Business News Portal RBC and other Russian media revealed, citing Intelion’s report. That is roughly the same amount as agriculture’s share of total consumption.
The prospects for the development of the crypto market in the Russian Federation look quite serious and require the legalization of activities such as mining, Novie Izvestia noted in an article. With almost all types of electricity generation at its disposal – nuclear power plants, hydroelectric facilities and a surplus of other capacities – Russia is able to achieve highly efficient cryptocurrency mining.
Russia’s largest mining operators on an industrial scale use 40-45% of the electricity used for mining in the country. The share of these miners in the total consumption volume has grown by an average of 5% to 7% each year, the study found.
Such a significant increase, when the sector is legalized and organized through transparent regulation, will bring about significant positive shifts at the macro level, such as growth in the employment of skilled workers, development of related industries and further digitization of the economy, the authors believe.
“Increasing interest in energy-intensive blockchain computing in the context of a significant surplus of energy resources in a number of Russian regions, undoubtedly, opens up new opportunities not only for participants in this market, but also for a significant number of industries and business Areas related to this market ,” commented Intelion Data Systems CEO Timofey Semyonov.
In July, Semyonov’s company published another report that concluded that Russia could become a major player in the Crypto Mining Space. This study listed the country’s most attractive regions for minting coins, including the capital Moscow and the adjacent Moscow Oblast, Karelia, Buryatia, Khakassia, Krasnoyarsk, Sverdlovsk, Murmansk and Irkutsk.
Bitcoin Mining is among the crypto-related businesses still awaiting extensive regulation in Russia, which as of January 2022 controlled close to 5% of the monthly global hash rate, according to the Cambridge Institute for Alternative Finance. However, Russian miners were later hit by US sanctions imposed over the war in Ukraine. Most officials in Moscow agree that crypto mining should be regulated and taxed like any other industrial activity.
Do you expect Russia to overcome its current challenges and realize its potential to become a leader in crypto mining? Share your thoughts on the topic in the comments section below.
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