Topic: Russia Becomes World’s Second-Largest Crypto Miner - page 4. (Read 1220 times)

I don't want to sound like I understand how Russia "works" because I don't! but I do get your points and agree with them, I have a Russian friend who moved his mining operation to another country and he did mention that it was pretty unsafe to mine in Russia for many reasons including the ones you mentioned, so it does make sense that it's pretty difficult for the regular people to deploy large operations there, but what about state-level operations or some Russian oligarchs who know how to protect their mining farms? do you think such people can/would invest in BTC mining?

I can use US pools, but I don't see the need for it when many other pools don't pose a problem for their miners. This will require additional software configuration to avoid blocking on American pools. It is only on the news that pools are refusing Russian miners.

Also, has there been any 'outside' conformation of this?
We all know mining is somewhat anonymous but that much hash, once again if it's modern equipment, would have to be pointed somewhere.

All the US / EU pools would cut them off in a moment if they knew that it was them so they would have to be careful where they mined.

Once again, assuming it's somewhat modern SHA equipment.

-Dave

It is difficult for a person not from Russia to understand what the phrase means: "The law is Taiga, the Prosecutor is the Bear." In the middle of nowhere there are other laws and there will be many hunters in the taiga for your equipment.
It is not a fact that installation of equipment In the middle of nowhere will be more profitable for you. Local officials, bandits will come to you in delegations and demand a share of the business. And those who do not share, usually the equipment disappears.

Ok but there is a huge difference between consumption and actual supply, of course in places where it's cold most of the time and the main source for heating is gas, the need for power is pretty limited which is pretty much the case for the majority of Russia,  but that doesn't mean the high-voltage grid is limited to that, there could be a power station able to deliver 5000MW but only 1000MW of that is used, the available 4000MW can be somehow easily deployed for mining operations.

The thing about mining is that it cares less about the location, usually, the issue with electricity is transmission rather than generation, to transfer that 4000MW to the nearest city it's going to be a very expensive job, but it's easier to bring your mining containers next to the source of power in the middle of nowhere.

Now this begs the question, is Russia limited to power generation or just transmission?

If you are interested in the age of the miners, then this is not 16-25 years old.
Basically, I see people from 30 to 50 years old and older, and it's not getting any younger. These are businessmen who have experience in IT, engineers and people with a technical mindset. Investing in mining requires a lot of initial capital, and young people do not have such opportunities. One small container for 100 ASICs is at least 20 million rubles or $240,000. This is big money in Russia.

Well, the population of Russia allows it to come in second place, a large proportion of young people are engaged in the crypt.

The consumption of a large city in Russia up to a million people is about 1000 megawatts, and the shortage of electricity is compensated from supplies from the Unified Energy System. Thanks to this idea of engineers from the Soviet Union in Russia, there are no problems with electricity in large cities that are connected in this system.
But it is very very difficult to connect 10MW now. Factories consume 2-3 MW, and it is difficult to agree on such possibilities.
Usually miners use 0.4MW transformers that are used for private summer cottages, camp sites and similar objects.

Supply of electricity is the most challenging part for large mining operations, the rest of the infrastructure is only a matter of money, say you have a 10MW transformer plugged into the grid ready to deliver power, you can just buy a few plug-and-play containers and get those 10MW up and running in no time, in fact, even the transformer itself can be deployed pretty easily, it gets harder if you need to bring in those overhead power lines of 400KV or 200KV  to the location.

Cheap electricity in Russia is only in a few regions of Siberia, but the problem is that the infrastructure for mining is not developed. This business is developed by old enthusiasts. It's good that this business is not taxed, or the miners have a chance to pay the minimum tax, because there are no control possibilities.

This is all that matters in my point of view, hashrate geographical centralization is the worst type of centralization we can have, most people complain about pools centralization which is pretty much harmless to a certain degree, but having all the hashrate in the same territory, subject to same laws of the same government is pretty risky, so any hashrate rising anywhere except for the U.S as of now is good, be it Russia, Japan, Pakistan or some aliens on the moon, we shouldn't care less.

I don't know if this is good or bad. I mean, it can be both. Russia has quite a few advantages over USA for instaance. They have land area, they have huge cold area, they have good realtions with China which is the manufacturer of one of the most common miners (Bitmain), they have quite a few sources of energy. So this seems to me quite a few pros to the country to invest more in mining. Ig they can't export the energy they produce, they can use it to mine. They don't even have to bitch or "negociate" with western countries to "please buy our energy so that we can keep funding this war"!!!

On the other hand, it may be good as a way of taking away the monopoly of the USA in mining! A bit more decentralised!

Delayed by the war no doubt. But the situation may change at any moment. They were clearly aiming to put a leash to all mining operations before the conflict. Kazakhstan was rising after the China ban, until the State started imposing restrictions, people protested and Russia sent troops to end the protests...

Cheaper is not always better. My country is less than half a cent (0.004) but so insecure you just can't risk investing anything as people lose their assets left and right from State intervention or criminality (or both). There was a certain hosting trying to bring investors, just pay 4 cents (so they net 10x) but guess what. State imprisoned the guy in charge of the institution in charge of regulating "crypto currencies". All mining was ordered to stop, at least half a year the investigations may take. That institution appears to be dismantled, the lower ranking officials fired, so who knows what new restrictions/institution they will come up with next (or outright ban).

Those who risked their money for the 4¢ hosting, now must face an unknown amount of downtime losses, and it can be worse, they may decide to confiscate the miners if they find that hosting was "too close" to the previous institution (and if you weren't "close", you would not be given the permits in the first place).

This is the hidden cost of high risk countries. Sure, Russia has more rich oligarchs, but even them may end up fleeing (remember how Telegram was created).

If you look at wholesale prices in the Irkutsk region, they are at least 2 times cheaper. There is a lot of old mining equipment in Russia, but when you buy it very cheaply in China and pay 3 cents for electricity and still do not pay taxes, then the miners make good money. The law on mining has not yet been adopted.

No wonder because according to https://www.statista.com/statistics/263492/electricity-prices-in-selected-countries/

Russia has cheap electricity around 0.06 per KwH and of course a good internet connection cold temperature and it seems regulation there allow to mine bitcoin with Crypto miners in Russia will have to declare earnings or face jail time. - https://beincrypto.com/russian-crypto-mining-bill-mandates-earnings-reports-face-jail-time/

Even if we only consider the gigawatts of energy, Russia is still far to be close to The USA (4 GW vs 1 GW)
Russia being under sanctions, almost no foreign company will deal with.

What about this rather, added with the higher taxes for miners, and the Ecology's terrorists...




1) Electricity's price
Like many countries, it is as a result of the war.
But it's something that will end sooner or later, and so it will return back to normal.

2) Higher taxes for miners, and the Ecology's terrorists
I'm refering to the paragraph below


Reality:
The United States is a resource-rich country with abundant renewable energy resources. The amount available is 100 times that of the nation’s annual electricity need.

Statistics:
In 2021, renewable energy sources accounted for about 12.4% of total U.S. primary energy consumption. Renewable energy sources accounted for about 19.8% of total utility-scale electricity generation.

And that was in 2021 (I haven't looked deep to get fresh data). In 2023, it's surely higher, since almost all countries are jumping in the renewable energy wagon, pushed by the terrorists of ecology...

Statistics about bitcoin mining:
According to the Bitcoin Mining Council's 2022 report, 59.5% of the total bitcoin mining global energy comes from renewable sources

So the taxes incrase has hardly any leverage. In exemple, Riot Blockchain use 100% renewable energy.
And the crypto mining companies are perhaps the first ones to accelerate the transition to a neutral carbon energy in their country. And if not, they just buy carbon offsets....

So at end, the mainly reason is the electricity's price, which as I said will come back.

Russia is really going all out with their mining efforts and they are outperforming many other nations in this regard. It is indeed peculiar to observe that they have overtaken Kazakhstan in terms of mining operations and are even competing with United States  to secure the top spot.

I must say that Russia still requires a significant amount of energy over 3 gigawatts to be precise to get close to the almost 4 gigawatts of energy put into mining by the United States.

Russia has the potential to reach top spot in the mining if they utilize their huge land mass properly by installing renewable energy systems, they can easily surpass other countries in mining operations by 2025.


I agree with you that power is not as important as hashrate in mining operations. Older mining equipment's are not energy efficient and can't produce the same hashrates as modern equipment's. The new generation miners are designed to use less energy while achieving higher hashrates.

It is also important to note that what if Russia is using the latest generation of mining equipment's? It can utilize its huge land mass by installing solar panels to add even more power to its operations. It is worth noting that China is favoring Russia and most of the mining tech is manufactured in China. By keeping that in mind I can say that Russia has upper hand in this regard and it could surpass United States in mining operations if things go in its favor.

Power does not matter vs hashrate.
If you are using 1 gigawat of power to mine with 3 generation old equipment it's meaningless. Someone with 1/4 the power could out mine them.

Hashrate and pool info (and I guess what they are mining) is what matters.
They could be burning all that power to mine ETC since they got all the ETH miners cheap.....

-Dave

Russia has become the world’s second-largest cryptocurrency mining country this year, the Kommersant business daily reported Friday, citing Bitriver, Russia’s largest bitcoin mining provider.

While the United States remains by far the world's largest crypto miner, boasting 3-4 gigawatts of mining capacity, Russia’s generating capacity reached 1 gigawatt in January-March 2023.

In taking second place for the first time, Russia took a spot previously occupied by Kazakhstan, which introduced restrictions on crypto mining activities in 2022 and now ranks ninth, Kommersant cited Bitriver as saying.