Russia may take up 18% of Bitcoin Hashrate, says expert

Russia to attract half of Kazakhstan’s cryptocurrency miners

Introduction

Russian analysts believe that the increasing regulatory pressures, tax burdens and energy costs in the USA, and Kazakhstan may result in the migration of crypto miners. And in such a case, Russia can occupy up to 18% of the global Bitcoin hash rate. 

Briefings

The negative developments of the industry in the world in the field of crypto mining have opened new doors for Russian Federation to increase its leadership. It is estimated by Intellion data systems, a major importer and distributor of mining hardware in Russia that the country’s share of Bitcoin Hashrate can reach up to 18%.

Cambridge Center for Alternative Finance calculated that Russia accounted for nearly 4.7% of the global hash rate in January 2022, thus ranking fifth in major mining destinations. However, there could be a rough edge in terms of toughening the policies towards the sector in the leading countries can cause other migration of miners as well, similar to China’s crackdown on the sector in 2021. 

Amid this situation of crisis and ascending prices of electricity, the restrictions to access low-cost energy and higher taxes may play a role in the relocation to Russia of up to 6% of the miners from the USA, Canada and China and half of Kazakhstan’s miners to migrate to Russia is estimated by Intellion team and posted this on the crypto page of the Russian business news portal RBC.

Russia’s share in the global Bitcoin hash rate

If the predicted case happens then Russia’s share in the global Bitcoin hash rate can rise up to 18% which equals to 3.95 GW of electricity consumption that will cost around 128 billion rubles or $1.7 billion. Bitriver, the leading Russian mining operator, stated in April that Russia has already reached second place in total power capacity in the whole world in terms of the facilities engaged in the extraction of digital currencies. 

To this, Timofey Semyonov, CEO of Intelion Data Systems, commented, Russia has everything that a crypto miner needs and has the opportunity to change the existing hierarchy of the global crypto mining market. The country provides you with all the infrastructure including low cost of electricity, reserves of free capacities and developed energy infrastructure in many regions.

Semyonov also stated that Russian companies have increased their efforts to expand their business and also support their country and government for the crypto mining industry. Although legal adoption by lawmakers in the crypto mining industry is yet awaited, official statements in Moscow have pointed out that Russian authorities are interested in adopting “competitive advantages” as mining hotspots, as described by President Putin.  

To create an amiable environment and investing climate, Russia must legalize crypto mining and clearly state all the rules of the game, as thought by experts from Intellion. They also believe that the global mining volumes will be increasing rapidly looking at the banking crisis in USA and Europe, which is marked just the beginning, which means will get worse in future. This will lead to the surging demand for Bitcoin and hedging tools and interest in crypto among traditional finance institutions. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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