Russia has the potential to become a major player in the crypto-mining space, and experts in the field have established in studies naming the most attractive regions for domestic coin minting operations. The capital city of Moscow is one of the most popular mining destinations, along with places that offer the cheapest electricity.
Electricity and logistics costs determine Russian miners’ choice of location for crypto farms
Russia has everything it takes to be a leader in the crypto mining industry, including low-cost electricity, excess generation capacity, and a well-developed energy infrastructure in many areas. This is one of the conclusions of a study conducted by mining equipment importer Intelion Data Systems, cited by RBC Crypto.
According to the company’s researchers, interest in establishing new data centers for digital currency extraction is growing across the vast landmass, and according to CEO Timofey Semyonov, the main task of the company is to find the right location for the facility, which is crucial for the effectiveness of capital investment. The main task of the company is to select the right location for the facility, which is critical to the effectiveness of the capital investment. Electricity prices and sufficient power generation are the main criteria, he notes.
According to Intelion Data Systems, the most popular locations to host mining data centers in 2021 were the capital city and Moscow Oblast, Karelia, Buryat, and Sverdlovsk, Murmansk, Irkutsk Oblast, the Krasnoyarsk Territory, and the Republic of Khakassia. In the first four regions, electricity demand exceeded the amount of electricity generated locally.
Industrial-scale crypto miners are guided in their choice primarily by the cost of electricity, and in the case of Moscow and adjacent regions by logistical advantages. Sometimes the latter is preferred over energy infrastructure as a factor, experts noted in a press release. They believe that data centers should be located in areas where not only the price of electricity is relatively low, but also where the amount of electricity generated exceeds the amount consumed.
The regions where these two parameters match are Irkutsk, Sverdlovsk, Murmansk, Republic of Khakassia, and Krasnoyarsk Territory. Power generation there is not only sufficient to meet current demand, but also to connect more consumers without overloading the distribution grid.
The authors of the study believe that mining farms could provide an economically viable solution to exploit Russia’s excess power generation capacity. Cryptocurrency mining can also expand the deployment of IT infrastructure in the Russian Federation, increase budget receipts in the region, and create new jobs.
Bitcoin mining, one of the crypto-related activities still awaiting regulation in Russia, dominated nearly 5% of the monthlyglobal hashrateas of January 2022, and nearly 5% of the monthly global hashrateas of January 2022. as of January 2022, the Cambridge Institute for Alternative Finance estimates. Most Moscow officials agree that mining should be recognized as an industrial activity and taxed accordingly. On the other hand, Russia’s mining sector has been hit by U.S. sanctions over the war in Ukraine.
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