Households Are Exploiting Cheap Siberian Energy to Mine Bitcoin

After China banned bitcoin earlier this year, Russia became the world’s second-biggest bitcoin miner country. Its cold climate nurtures the perfect conditions for bitcoin rigs to function at top performance for long periods without fancy cooling systems. But in addition to enterprise operations, home mining is also becoming popular in Russia.

According to a report by The Telegraph, over 14,400 households in Irkutsk, Russia, are estimated to be mining bitcoin, up from 8,000 last year. The region benefits from the cold weather and has the lowest energy prices in the country.

“To be honest, I still don’t fully understand how this thing works,” Marina, a 64-year-old bitcoin miner in Irkutsk, told The Telegraph. “The idea that I have money land into my account every month warms my heart as a pensioner.”

She said she had made thousands of dollars from mining bitcoin in an attempt to increase her monthly income. Marina earns a state pension of around $160 per month.

In Irkutsk, energy prices are set differently depending on their usage; industrial activities currently pay about four times as much as households, according to the report. As people set up sizable mining operations in residential areas, seeking to benefit from even lower power costs, the line between home and corporate energy usage is muddled.

“Irkutsk is surrounded by a belt of Bitcoin miners, and they overload the power lines that are not designed to handle such an amount,” said Oleg Prichko, general director of Irkutskenergo, Irkutsk’s local electricity company, per the report. In the region’s suburbs, dozens of established bitcoin farms consume Irkutskenergo’s energy at business rates.

According to the report, the power company has already filed dozens of lawsuits against suspected miners as senior manager Yevgeny Vlasov compiles data to prove they need to switch to corporate rates.

In October, Russian President Vladimir Putin commented on Bitcoin while addressing the country’s desire to move away from using the U.S. dollar. He said that while Bitcoin has value and a “right” to exist, he didn’t believe the country could use it in the oil trade. One month later, deputies proposed a bill to legalize bitcoin mining in a push to gather a cut of miners’ profits.

But earlier this month, Reuters reported that the Russian central bank was considering a stark move into prohibiting bitcoin in the country altogether. The bank reportedly said investing in bitcoin could pose risks to the country’s financial stability.

Source link