Russia is now the second largest bitcoin mining center after the United States - InsideBitcoins.com

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According to Russia’s largest bitcoin mining provider, Bitriver, Russia is now the second largest cryptocurrency mining country in the world. Russia’s generating capacity reached 1 gigawatt between January and March 2023, second only to the United States, with a mining capacity of 3 to 4 gigawatts.

For the first time in history, Russia overtook Kazakhstan for second place. According to Bitriver, Kazakhstan now ranks ninth after restrictions on cryptocurrency miners in 2022. In the list of the top 10 mines on Bitriver, China was not represented because the government banned cryptocurrency mining in 2021.

🇷🇺 Russia overtook Kazakhstan to become the second largest bitcoin mining powerhouse by generating 1 gigawatt of mining capacity in the first quarter of 2023.# Bitcoin #Russiahttps://t.co/mfxTu8SdzH

– Bitcoin News 🌴 Rooftop Meet May 19th (@BitcoinNewsCom) April 24, 2023

Cryptocurrency laws in Russia restrict the use of Bitcoin. Among them is President Vladimir Putin’s 2020 Law on Digital Financial Assets, which legalized cryptocurrencies but banned their use in commerce. Russia has long been associated with evading sanctions through cryptocurrency. In February, the US blacklisted bitcoin and ether from addresses believed to be involved in international sales of Russian defense equipment.

The European Union has banned cryptocurrency transactions with Russian citizens and residents. The penalties are part of the eighth round introduced last year.

The country supports the mining of Russian cryptocurrencies

Authorities in the United States are taking steps to regulate cryptocurrency mining. In the wake of these latest developments, Russia may close the gap between itself and the largest Bitcoin miner in the world.

A recent report said that the Russian government will support the construction of an East Siberian mining center with a capacity of 100 megawatts. Currently under construction by BitRiver, the crypto farm will pay no property tax and will benefit from lower income taxes. Plus, you’ll get a 50% subsidy on electricity.

Russia offers tax incentives for those who want to invest in cryptocurrency mining! With direct support from the government, a new $12 million cryptocurrency mining center will be opened in Eastern Siberia, which has 30,000 digital miners.

Read more: https://t.co/SqcOuGkbgf pic.twitter.com/rTTfufGS7m

– WenMint (wenmint_nft) February 13, 2023

Regulations have an important role to play

Regulatory changes greatly affect the ranking of the best BTC miners. Kazakhstan is a good example. When it was the second largest mining powerhouse in late 2021, the country held 18% of the global hash rate. By the end of 2021, the country was experiencing an energy crisis, which caused the government to look closely at miners.

The country has cracked down on miners in response to the energy crisis. Energy supplies were cut off, regulatory frameworks were tightened, and tax rates discriminated. Mining power declined due to these changes, and the country represented only 6.4% of global hashing power at the start of 2023.

According to experts, Russia’s rise in the charts is likely related to Kazakhstan’s change in its attitude towards mining. Meanwhile, cold climates and cheap electricity in various regions are expected to boost mining activities in Russia.

It is unclear what the US will do about bitcoin mining. Therefore, it is difficult to say whether the United States will hinder mining activities and leave Russia in the lead, or whether it will strengthen itself to widen the gap.

Alisa Tsukanova, Marketing Director of EMCD, believes that there are many regions in Russia where cryptocurrency mining is more profitable based on electricity prices. Besides lower electricity costs, these regions (Krasnoyarsk Territory, Irkutsk and Sverdlovsk) also have a “favorable mining climate” that does not require additional cooling equipment.

Experts say that despite the growth of the mining industry in Russia, factors still hinder its development. In particular, the draft mining regulation was submitted to the State Duma in November but has not yet been passed.

According to Mikhail Brezhnev, co-founder of 51ASIC, some aspects of mining regulation and the work being done by regulatory authorities will have a significant impact on the market – both positively and negatively, slowing industry growth and foreign investment.

It will be easier for those involved in the mining industry to plan operational and financial activities with balanced and proven legislation. Mr. Runets believe that they will implement large projects, attract investments, and develop areas related to the Russian economy, primarily the electric power industry and information technology.

Moreover, foreign policy risks for Russian miners are growing. According to Brezhnev, secondary sanctions should be imposed on banks, exchanges, pools, and other foreign services that work with Russian mining companies.

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