Cryptocurrency mining is on the rise in Russia with the country now taking the second spot for total power capacity devoted to digital currency production. According to data provided by Bitriver, one of the country’s largest miners, a staggering 1 gigawatt (GW) was reached during the first three months of 2023.
The United States continues to remain at the top spot with 3-4 GW of mining capacity available, while other countries such as Gulf Power (700 MW), Canada (400 MW), Malaysia (300 MW), Argentina (135 MW), Iceland (120MW), Paraguay (100-125 MW) and Ireland (90 MW) make up the rest of the top ten list.
Kazakhstan’s policies helped Russia achieve the feat
Kazakhstan’s policies against crypto mining have also helped boost Russia’s positive trend. Recently introduced regulations saw an influx of miners leaving China following its industry crackdown for more affordable costs in Kazakhstan.
Unfortunately, due to electricity shortages in Central Asia, authorities quickly started shutting down authorized mining data centers and illegal crypto farms, leading many miners back to Russian borders.
Not surprisingly, increasing electricity rates in the U.S., a fall in mining profitability and abolished tax incentives have slowed down America’s lead as global leader in terms of hashrate share.
Igor Runets, CEO of Bitriver said that many over-leveraged American companies are now facing bankruptcy or have gone bankrupt as a result – including those who resorted to purchasing equipment on credit.
United States holds on to top spot
Regulatory actions by U.S authorities may also potentially spark further market redistribution according to Roman Nekrasov, co-founder of Encry Foundation which provides blockchain and tech innovations services . He believes these could cause another major shift among players in the mining market worldwide .
Meanwhile, BitRiver also reports that Russian crypto miners‘ combined energy capacity rate exceeds 2.5 GW which is twice as much from what research from August showed – when it was revealed that electricity consumption had increased 20 times within five years between 2017 and 2022 .
This exponential growth is credited to inexpensive energy supplies combined with cool climates such as the Irkutsk region , however further development depends largely on adequate legislation being passed by Moscow’s Parliament – which hasn’t yet happened.
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