Russia is ready for a massive influx of "bitcoin immigrant miners"

Despite its hesitation about the issue of centralized energy for cryptocurrencies, Russia is quietly preparing for an influx of cryptocurrency miners from the West and the East. There are already reports of what the country will do to invite these miners. Nearly a third of Soviet-era energy is now idle after several energy-consuming industries were shut down or closed in the 1990s. Experts from home and abroad, as well as members of the local cryptocurrency community, agree — Russia will welcome Bitcoin miners from China and Europe. Moscow will most likely say “yes”. . . . . . Or at least not “no”.

Business the Russian way

"Hello, we invite miners from China to come to Russia!! Maximum power capacity - 20MW ... 3 rupees/kWh (0.05 dollars; 0.32 yuan)". This is one of the many advertisements you can see on Bitcoin forums in recent days. The power has been deployed for the corresponding mining machines - ready at any time, the network cables are spread throughout the 5,000 square meters of the building with circulating cold air - the safety facilities have also been deployed, fire alarms and CCTV cameras - after installation, there will be 24/7 technical support - this is business the Russian way. The country is ready and also boasts that they can give many benefits and benefits to miners working near the Great Wall, but this is not enough, "Do you cooperate with European counterparts?" You will read this question when you scroll down the page. "I will send the contract for you...", the reply written at the end says.

Russia has received dozens of applications from Chinese and European companies and individuals to mine bitcoin, new.bitcoin.com reports. The Russian Cryptocurrency and Blockchain Association has invited partners from China and Slovakia to help handle the surge in requests to mine in Russia. Spanning 11 time zones, rich natural resources and cheap energy, the world's largest country has a lot to offer bitcoin miners. According to estimates, the mining industry will solve federal and local debts by trillions of rubles. At the same time, Russian experts say that the authorities will definitely consider adding reasonable conditions to accommodate this market.

Intercepted long wave radio conversations

The concrete developments in western and eastern Russia have long been acknowledged by the government, business and cryptocurrency communities. The messages from Beijing, Brussels and Washington have been heard and certainly analyzed and interpreted. Not wanting to sacrifice even an inch of its “sovereign democracy”, Moscow hopes to gain a little from where competitors and rivals have withdrawn.

Several major players in the "multipolar" world have recently cleared the battlefield in the wake of the hibernation, the bear market and the bull market, which is exactly what Russia wants to see. In preparation for the upcoming G20 summit in March this year, Paris and Berlin are working together on a joint Franco-German agreement to regulate cryptocurrencies; the US Treasury is seeking the help of the G20 to block "digitally anonymized Swiss bank accounts"; and a working group led by the People's Bank of China is developing measures to govern and restrict mining in those areas of China that offer the best conditions (cheap electricity and cool climate). Russia has both the right climate and cheap electricity, energy and political conditions to invite those driven away cryptocurrency business projects and miners.

Russian authorities are looking abroad for advice to prepare a legal framework for regulation, which will be introduced this summer. Miners from 15 countries have been asked to explain to Russian lawmakers how cryptocurrencies are mined and to share knowledge about different regulatory approaches. The Russian Cryptocurrency and Blockchain Association has asked experts from China and Slovakia to provide advice on the surge in mining requests to Russia. They join a special committee representing the sector, said Yuriy Pripachkin, chairman of the Russian Cryptocurrency and Blockchain Association, in an interview with RIA Novosti . The intention to attract miners from Europe has been discussed in the past.

“I don’t see any problem with China starting to build mining plants in Russia,” Sergei Repetyuk, head of economics at the Institute of Economics and Natural Monopolies, was quoted by the institute as saying, adding:

"Even at its peak, more than 40 percent of Russia's energy output was not being used."

Repetyuk's claims were supported by Evgeniy Itsakov, assistant professor at the Faculty of Economics and Social Sciences: "There is a large overproduction of cheap electricity in Russia, and this capacity was created to meet the needs of the Soviet heavy industry," he explained. Cryptocurrency mining has become a separate sector and will continue to exist until more efficient systems are developed, as trust and anonymity are invented, Evgeniy Itsakov added. He insisted that the authorities must seriously consider establishing some level playing field in the market.

Soviet-era equipment powers today's groundbreaking technology

Cryptocurrency mining requires a lot of energy. According to Dgiconomist and RIA Novosti, Bitcoin's proof-of-work mechanism consumed more than 40 terawatt hours of electricity in 2017. As of December, confirming Ethereum transactions consumed more than 10 terawatt hours of electricity. More than 80% of the world's mining is currently carried out on Chinese territory. Potential energy shortages in some provinces where large mining plants are located have been reported and have caused great concern in Beijing. Authorities in two autonomous regions - Inner Mongolia and Xinjiang, as well as two provinces - Sichuan and Yunnan - have received guidance from the capital to limit the supply of electricity to miners.

Much of the capacity built to power Russia’s heavy industry is wasted. Even at its peak, Russian households and businesses consumed only 60% of the country’s coal, hydro, and nuclear power plants. Russia’s cumulative electrical capacity is estimated at 236 GW, far more than the country needs. Experts at the Russian Association of Cryptocurrency and Blockchain have calculated that if 100 GW of that wasted energy were used to power cryptocurrency mining projects, the Russian economy would gain 1.7 trillion rubles ($30 billion). Chinese miners should be encouraged by the fact that a large amount of Russia’s energy is concentrated in the Far East. President Vladimir Putin’s local representative, Yuriy Trutnev, has proposed using excess energy for cryptocurrency mining, as reported by the Ural Federal District.

There is a certain symbolism about the "migration period" that has begun in Asia. Cooler climates and cheaper energy will become important factors for miners to reconsider their deployment of mining machines. Russia and some other Eastern European countries, as well as Canada and Iceland, have attracted media attention as the final destinations for mining. Some countries have begun to compete and recruit Chinese miners. Some regions, such as Quebec City, have expressed their readiness to welcome miner immigrants and promised to provide low electricity prices and positive policy support.

If Russia wants, it should join the race, for example, Moscow local institutions will be able to get support from the federal government. A silent but heated debate in Moscow exposed the red lines of some power sectors. The financial sector supports the legalization of cryptocurrency derivatives trading, but is very cool to the proposal of cryptocurrency rupee. The central bank has been working on issuing the national digital currency, but traditional exchanges are reluctant to trade in cryptocurrencies as a financial method. At the same time, the Kremlin is unlikely to reveal its true intentions before the presidential election in March this year. Although Russia likes the idea of ​​leading cryptocurrency mining, it does not mean acceptance of cryptocurrencies. Until other laws and regulations are said, this seems to be a safe way to recognize Bitcoin and other cryptocurrencies.