Russia is now the second country in the world for using energy to mine for cryptocurrency. Even though governments are unsure of how to control these digital currencies and have put restrictions on them, more and more energy is being used to create it this year than ever before.
Russia has moved into second place in the world for its total capacity of cryptocurrency mining. This means that Russia is now using 1 gigawatt (GW) – which is equal to 1 thousand megawatts – of power for coin minting, according to data from Bitriver, their biggest miner.
The USA is the most powerful when it comes to mining capacity with around 3 to 4 gigawatts (GW). Countries like Saudi Arabia, Canada, Malaysia, Argentina, Iceland, Paraguay, Kazakhstan and Ireland are following close behind with 700 megawatts (MW), 400 MW, 300 MW, 135 MW, 120 MW, 100-125 MW and 90 MW respectively.
Bitriver says that the good news for Russia is connected to what happened in Kazakhstan last year. Kazakhstan officials closed down data centers used for mining as well as illegal crypto farms because they didn’t have enough energy. The missing energy was caused by miners who went there after China banned mining. To try and prevent this from happening again, a law came into effect in February limiting how much miners can use unfavourable, low-cost electricity.
The U.S. is the leader in terms of controlling a lot of hashrate, which is like digital power used to run computers that help secure Bitcoin transactions. However, since electricity prices are going up and it isn’t as profitable anymore to mine for Bitcoin, there is less interest in doing it and some tax incentives have been canceled. Bitriver CEO Igor Runets explained that companies bought expensive equipment on loan but now many of them are bankrupt or getting close to bankruptcy because they don’t make enough money to pay their debts.
What U.S. authorities are doing is also catching the eye of people who watch the market, said Roman Nekrasov from Encry Foundation, which looks after tech companies that help blockchain and tech change. He thinks the government might cause another big switch in the mining market.
Alexander Brazhnikov, who is in charge of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (Racib), revealed that there may be more energy used for crypto mining in Russia. Bits.media reported about what he said: Russians apparently have around 800,000 ASIC miners combined, which adds up to a total power rating of more than 2.5 GW.
Researchers have noticed that the amount of electricity used for mining in Russia has grown by twenty times in the last 5 years, from 2017 to 2022. The industry is thriving there due to the easy access to cheap resources and cooler climates, like Irkutsk. However, it is unclear what will happen next as no laws are in place yet. The government needs to pass a law for this industry so it can keep growing.
Do you think Russia’s crypto mining industry will continue to get bigger in the future? Let us know your opinion down in the comment section.