The electricity needs of cryptocurrency miners in Russia have increased significantly since 2017, with electrical energy consumption seeing a 20-fold increase in five years. 2021, the largest market cap coin, the Bitcoin, required 1.25 gigawatts in the country for its minting. But experts say Russia has the extra capacity to meet a much larger demand.
Crypto Miners Spend as Much Power as Russian Farmers
Crypto mining uses as much power as Russian farmers.
Power consumption in the Russian crypto mining industry has been constantly rising since 2017, a new study has established. According to experts working for mining hardware importer Intelion Data Systems, this positive trend has led to an annual increase rate of at least 150%. Their calculations revealed that the extraction of
Bitcoin (BTC) alone would require 1.25 gigawatts of energy in 2021. The amount of electricity used to produce other major cryptocurrencies such as Ether (ETH) and Litecoin (LTC) could add another 40-50% of BTCconsumption, the researchers BTCconsumption could add 40-50% to the consumption of BTC, the researchers said.
Various government agencies estimate that cryptocurrency mining accounts for between 0.64% and 2% of total electricity consumption in the Russian Federation, business news portal RBC and other Russian media outlets have revealed, citing a report by Intelion. This is about the same as the share of agriculture in total consumption.
The prospects for the development of the crypto market in the Russian Federation appear to be quite serious, requiring legalization of activities like mining, Novie Izvestia noted in the article. With almost all types of power generation at its disposal, including nuclear power plants, hydroelectric facilities, and other surplus capacity, Russia is in a position to achieve highly efficient cryptocurrency mining.
The share of industrial cryptocurrency mining continues to grow
Russia’s largest industrial-scale miners consume 40-45% of the electricity used for mining in the country. The share of these miners in total consumption is increasing by an average of 5% to 7% each year, the survey found.
The authors believe that such a significant increase, once the sector is legalized and organized through transparent regulation, will be accompanied by significant positive changes at the macro level, including increased employment of highly skilled workers, development of related industries, and further digitalization of the economy.
Timofey Semyonov, CEO of Intelion Data Systems, said, “In the context of a significant surplus of energy resources in many regions of Russia, there is a growing interest in energy-intensive blockchain computing, and this market will undoubtedly open up new opportunities not only for participants, but also for a significant number of industries and business sectors related to this market.”
In July, Semyonov’s company published another report concluding that Russia could become a major player in the field of crypto mining. The study listed the most attractive regions for coin mining operations, including the capital Moscow and adjacent Moscow Oblast, Karelia, Buryat, Khakassia, Krasnoyarsk, Sverdlovsk, Murmansk, and Irkutsk.
Bitcoin mining is one of the crypto-related businesses awaiting comprehensive regulation in Russia, controlling nearly 5% of the global monthly hash rateas of January 2022. According to the Cambridge Institute for Alternative Finance, as of January 2022, it controlled nearly 5% of the world’s monthly hashrate. But Russian miners have since been hit by U.S. sanctions imposed in the war in Ukraine. Most Moscow officials agree that crypto mining should be regulated and taxed like other industrial activities.
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