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Russia is now world’s third largest bitcoin miner, as US takes first place following Beijing’s digital currencies clampdown.
Founder and Editor, The Tech Capital
October 18, 2021 | 4:12 AM BST
Moscow said it is considering new energy tariffs aimed at cryptocurrency miners as Chinese businesses are forced to exit the country following Beijing’s blanket ban on the industry.
Russian Energy Minister Nikolai Shulginov announced the government is studying ways to charge crypto miners differently for their energy consumption versus the general population.
He said: “We are working on the issue within the electric power industry. To maintain the reliability and quality of power supply, we believe it is necessary to exclude the possibility of electricity consumption by miners at tariffs for the population.
“It is impossible for miners to use [power] and worsen the situation at the expense of reduced tariffs for the population.”
Parts of Russia have experienced an upsurge in energy usage following Beijing’s crackdown on crypto mining which has sent the global price of bitcoin plummeting.
The “resolute clamp down” in China, which also reiterates that all virtual currencies are illegal, was announced in a joint statement published by China’s central bank, the People’s Bank of China, and 10 government agencies at the end of September.
The announcement has consequently sent crypto operators in China into alarm mode, with many finding new homes overseas for their businesses resulting in Russia taking in several brands.
One of Russia’s regions that has felt the ban the most is Irkutsk Oblast, in Siberia, which sits 1,000Km away from the Chinese border and 1,600Km from Beijing.
Governor Igor Kobzev said on his Instagram page that energy consumption has increased by 159% this year alone, and the “clandestine” increase was “solely due to a certain group of people”.
“I’m talking about underground cryptocurrency miners. They unscrupulously take advantage of the fact that our region has low electricity tariffs. They are making money off of it,” he added.
“But their activity puts a huge strain on the network. All of this is fraught with accidents.”
He continued to say that miners have to pay different rates for electricity and that it should “fall solely on their shoulders” to pay for the overconsumption that occurs due to their “farms”.
“This is how we can protect all residents,” Kobzev added.
He explained that in his discussion with Deputy Prime Minister Alexander Valentinovich Novak, one of the proposals is to legislate “mining” as a kind of business activity.
In this case, the miners would not be able to consume energy at the rates for the population.
The Governor also pointed out the dangers of over power utilisation as the Markovsky municipality experienced power outages due to grid overexploitation.
“This can lead to an emergency” during the Winter, he warned.
According to Cambridge University, Russia is the world’s third largest mining nation by market share at 11.23%. The US comes first with 35.40%, followed by Kazakhstan at 18.10%.
The current global bitcoin power consumption stands at 11.78GW, however, Cambridge estimates that the real power usage might be as high as 44.18GW.
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