Dirt To Digital: Russia Does Mining

Mining in Russia over the centuries has been done with verve and pioneering spirit. Whether it be digging for Gold, Platinum, Iron,?Diamonds, or Coal it was generally done in a big way, no matter how remote the location. With the advent of the digital age, the Russian Crypto Mining world is also showing a dynamic pioneering spirit, and like the geological brethren, in mostly far-removed locations. Russia has jumped to number two for crypto-mining these first three months of 2023.

Achieving the second spot looks good, but it is just a start, A massive new data processing center will start mining by Q3 or latest Q4 in Buryatia, a remote Russian republic in eastern Siberia. The center is expected to include 30,000 mining devices, with a projected total power consumption of 100 megawatts, at a CAPEX of about 900 million rubles, and create 100 new jobs in Buryatia.

This is a project that is run by the Corporation for Development of the Far East and the Arctic, with governmental support. Operating costs of this Buryatia-based mining farm will be subsidized in various ways, including exemptions from land and property tax, reduced rates for social insurance taxes to 7.6%, low-income taxes, and so forth.

The 100-megawatt mining station will pay only half the listed cost for its electricity once connected to the national power grid. This high level of federal support is based on the economic status of Buryatia, which is considered a "Priority Development Area" and these incentives should attract investments from both local and foreign entities to further enhance opportunities in this distant region.

Russia has come around to acknowledging the massive growth and demands potential of the Cryptosphere, especially in these financially-sanctioned times. Then add to that the potential of using cryptocurrency in the settlement of cross-border transactions only sweetens the idea and its game-changing potential.?

As I mentioned earlier during this first quarter of 2023 Russia climbed to second place worldwide for Cryptocurrency mining. The U.S. remains the leader with 3-4 GW of mining capacity. After the U.S. and Russia in descending order are the Gulf States, Canada, Malaysia, Argentina, Iceland, Paraguay, Kazakhstan, and Ireland to round off the top 10.?

The United States ranks comfortably first in mining cryptocurrencies and controls almost 38% of the hash rate. In the majority of European countries mining is increasingly being regulated while the effects of high energy and labor costs have made it unprofitable.?

Taking an increasingly similar path as Europe, the U.S. has also increased various regulations which in effect are pressuring crypto miners to search for more friendly environments elsewhere. Unforeseen regulations such as the State of North Carolina placing a moratorium on mining statewide as they feel it produces excessive noise. The North Carolina ban is seen by authorities as a tool to develop new standards for the industry in mitigating potential environmental impacts. Last year the Governor of New York ratified a similar two-year ban on miners. Other states are preparing similar initiatives, which, according to the Crypto industry will cause mining to slow down, and eventually leave the U.S.

Russia views this as a trend with a solid foundation as several regions like Buryatia are quite profitable for mining due to low costs, readily available energy, a suitably educated workforce, and the need to develop around productive in-demand businesses. Developments to date indicate that Russia could realistically, and in a very short time, become country number one in the world of cryptocurrency mining.