Power needs of cryptocurrency miners in Russia have grown significantly since 2017, with electricity consumption seeing a 20-fold increase over the five-year period. In 2021, the stamp of the currency with the largest market cap, bitcoin, claimed 1.25 gigawatts in the country. Experts say, however, that Russia has the spare capacity to meet much greater demand.
Crypto Miners spend as much power as Russian farmers
Electricity consumption in Russia’s crypto mining industry has been steadily rising since 2017, a new study has established. The positive trend has led to an annual growth 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 amount of electricity used for the production of other major cryptocurrencies, such as ether (ETH) and litecoin (LTC), may be another 40-50% of BTCthe consumption, say the researchers.
Various government institutions estimate that cryptocurrency mining accounts for between 0.64% and 2% of the total electricity consumption in the Russian Federation, the business news portal RBC and other Russian media revealed, citing the Intelion report. That is about as much 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 power generation at its disposal – nuclear power plants, hydropower facilities, and a plethora of other capabilities – Russia is in a position to achieve highly efficient crypto mining.
The share of Industrial Crypto Mining Continues to Grow
Russia’s largest industrial-scale mining operators consume 40-45% of the electricity used for mining in the country. The share of these miners in the total volume of consumption grew on average from 5% to 7% annually, the study found.
Such a significant increase, once the sector is legalized and organized through transparent regulation, will bring with it significant positive changes at the macro level, such as an increase in the employment of highly qualified workers, development of related industries and further digitization of the economy, the authors believe.
” Growing interest in energy-intensive blockchain computing in the context of a significant surplus of energy resources in some Russian regions, undoubtedly, opens new opportunities not only for participants in this market, but also for a significant number of industries and business. areas related to this that market,” said Timofey Semyonov, CEO of Intelion Data Systems.
In July, Semyonov’s company released another report concluding that Russia could become a big player in the crypto mining space. That study listed the nation’s most attractive regions for minting operations, 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 that still await comprehensive regulation in Russia, which, as of January 2022, controlled close to 5% of the monthly. global hashrate, according to the Cambridge Institute for Alternative Finance. However, Russian miners were later hit by US sanctions imposed due to the war in Ukraine. Most officials in Moscow agree that cryptomining should be regulated and taxed like other industrial activities.
Do you expect Russia to overcome the current challenges and realize its potential to become a leader in the crypto mining space? Share your thoughts on the topic in the comments section below.
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