Russia Ranks Second in the World for Cryptocurrency Mining

Impressive growth of Russia’s Cryptocurrency Mining Market

The Russian cryptocurrency mining sector has been recording remarkable growth statistics. In 2023 alone, mining volumes had an estimated growth of more than double from the previous year reports Kommersant. According to BitRiver, Russia’s largest mining data center operator, roughly 54,000 bitcoins – with a value of $3.5 billion – were mined in the country. This significant figure enabled Russia to secure the second-place position globally in cryptocurrency mining volumes, trailing only behind the United States.

Promising future for Russia’s cryptocurrency sector

Experts forecast that, under favourable conditions, the industry’s growth rate could vary between 20 to 40 percent this year. Such an achievement would likely hinge on the adoption of balanced industry regulation that can further cement Russia’s leadership position in the global market.

Last year, Russia utilized approximately 2.2 gigawatts (GW) of mining power, while the U.S. operated with a massive figure of 5.3 GW. Remarkably, Russia’s mining functions primarily concentrated on bitcoin, with an estimated 95 percent provided by BitRiver.

What makes Russia attractive for miners?

Several key factors make Russia an attractive hub for miners. These include affordable electricity tariffs, the favourable Siberian climate and other northern regions needed for cooling systems, and the availability of spare industrial spaces. As per Nikita Vassev, the founder of TerraCrypto, the cost of mining one bitcoin for a farm consisting of 200 machines is around 2.8 million rubles per month. With the current prices, miners break even in six months.

As of now, cryptocurrency mining activities in Russia operate with no formal legislative regulations. However, with the digital financial assets law recognizing cryptocurrency as property, related bill drafts are under review, states Yaroslav Shitsle, head of IT&IP disputes from Rustam Kurmaev & Partners. Experts believe that balanced regulations might reinforce Russia’s position in the global mining market, with Shitsle warning about the risks posed by excessive regulation for the industry’s profitability.