Russia has overtaken Kazakhstan as the second largest country in terms of energy capacity for bitcoin mining, according to local media.
The Russian newspaper Kommersant, focused on politics and economics, has provided data that positions Russia as the second most important country in Bitcoin mining.
Data from crypto mining companies analyzed by the outlet shows that Russia has significantly increased the amount of electrical power allocated to the Bitcoin network and its miners this year, so the country at war with Ukraine is currently mining more bitcoins than its neighbor Kazakhstan.
According to the data, The amount of electrical energy used for bitcoin mining in Russia is 1 gigawatt (GW).
While the United States continues to lead Bitcoin mining activity, Russia seems determined to become the world leader, even though the country still does not have clear regulations for this industry.
Russia promotes bitcoin mining
Bitcoin and cryptocurrencies have gained an important role in Russia since the war against Ukraine began.
The country has taken a more friendly approach to crypto assets and has considered their possible acceptance and regulation. The Russian government is even considering the possibility of adopting blockchain technology to create a new independent payment system, as well as the creation of a national exchange.
Regarding Bitcoin and other cryptocurrency mining, The Russian government introduced a bill last November focused on legalizing cryptocurrency mining in the country, as well as enabling the sale of cryptoassets obtained through this activity. The Ministry of Economic Development of Russia also presented a proposal to ensure a constant flow of energy to regulated bitcoin miners.
On the other hand, crypto mining also has the support of Russian President Vladimir Putin, who has repeatedly highlighted the competitive advantages that the nation has to lead this activity, as one that could boost its economic development.
Russia overtakes Kazakhstan
Igor Runets, CEO of bitcoin mining company BitRiver, he pointed that all these factors are increasing Russia's attractiveness as a crypto-friendly jurisdiction.
The country is currently reflected in the Bitcoin Mining Map, compiled by the Centre for Alternative Finance at the University of Cambridge, as the fourth most important country for the Bitcoin network, in terms of hash rate or computing power. According to this map, Russia is behind countries such as the United States, Kazakhstan, Canada, and even China, which previously led bitcoin mining with more than 65% of the network's hash rate on its territory.
Source: Bitcoin Mining Map
Climate and low electricity rates give Russia the competitive edge in bitcoin mining
According to Runets, Russia has favorable conditions for the development and expansion of bitcoin mining, such as climate and low-cost electricity, among others.
Alisa Tsukanova, Marketing Director of EMCD mining pool, also highlighted Russia’s low temperatures in regions such as Irkutsk and Sverdlovsk as one of the most favorable elements for the development of crypto mining, as it makes it unnecessary to “spend additional funds on cooling equipment” for miners.
On the other hand, the regulatory measures that the government of Kazakhstan has imposed on cryptocurrency mining have also been favoring Russia's leadership.
Furthermore, the growing regulatory pressure that lawmakers and environmentalists in the United States are exerting on this activity of the crypto industry will ultimately benefit Russia's image as a crypto-friendly nation, the BitRiver CEO continued.
However, for Russia to establish itself as a leading nation in crypto mining, it is necessary to create and establish “balanced and verified legislation that allows participants in the mining industry to plan their operational and financial activities, develop and implement important projects, attract investments and develop related areas of the Russian economy, primarily electricity and information technology.”
Continue reading: What will happen to Bitcoin? The United States and Russia could be the new leaders of the crypto industry
