Russia could be a large player in the crypto mining space, experts in the field have established in research naming the most attractive regions for coin minting operations in the country. The capital Moscow is among the popular mining destinations alongside the places offering the cheapest power.
Cost of Electricity, Logistics Determine Russian Miners’ Choice of Location for Crypto Farms
Russia has everything necessary to become a leader in the crypto mining industry, including low-cost electricity, surplus generating capacity, and well-developed energy infrastructure in many of its regions. That’s one of the conclusions in a study conducted by Intelion Data Systems, an importer of mining equipment, quoted by RBC Crypto.
The company’s researchers say that interest in setting up new data centers for digital currency extraction has increased across the vast country. The primary task for businesses is to choose the right location for their facilities, crucial for the effectiveness of capital investments, according to CEO Timofey Semyonov. Electricity rates and sufficient generation are the main criteria, he pointed out.
Intelion Data Systems has found that the most popular places for hosting mining data centers in 2021 were the capital Moscow and Moscow Oblast, Karelia, Buryatia, as well as the Sverdlovsk, Murmansk, and Irkutsk regions, the Krasnoyarsk Territory, and the Republic of Khakassia. In the first four regions, power demand was higher than the locally generated volume of electrical energy.
Industrial-scale crypto miners are led in their choice by the cost of electricity in the first place, and in the case with Moscow and the adjacent region, by logistical advantages. Sometimes, the latter prevail over the energy infrastructure as a factor, the experts have noted in a press release. They believe data centers should be set up in regions where not only the price of electricity is relatively low, but also generation exceeds consumption.
The regions where the two parameters match are Irkutsk, Sverdlovsk and Murmansk, the Republic of Khakassia, and the Krasnoyarsk Territory. The volume of generated electricity there is sufficient to not only meet the current demand, but also allows to connect more consumers without overloading the distribution networks.
The authors of the study believe that mining farms can provide an economically viable solution to utilize the excess generating capacities in Russia. Cryptocurrency mining can also expand the deployment of IT infrastructure in the Russian Federation, increase budget receipts for its regions and create new jobs.
Bitcoin mining is one of the crypto-related activities that still awaits regulation in Russia which, as of January 2022, controlled close to 5% of the monthly global hashrate, as estimated by the Cambridge Institute for Alternative Finance. Most officials in Moscow agree that mining should be recognized as an industrial activity and taxed accordingly. Meanwhile, the Russian mining sector has been hit by U.S. sanctions imposed over the war in Ukraine.