According to a report from BitRiver, Russia's largest crypto mining entity, the Russian crypto mining sector is anticipated to see growth ranging between 20% and 40% in 2024. This information was shared by industry insiders and reported by Overclockers.
BitRiver has been a key player in the Russian crypto mining scene and has been actively involved in advocating for legislative changes that could potentially lead to the "legalization" of the industry.
The Russian Crypto Mining Sector "Keeps Growing"
The "low cost of electricity" and "the absence of strict regulation by the authorities," according to analysts' study, are driving "good growth dynamics" for cryptocurrency miners.
The Industrial Mining Association's director, Sergei Bezdelov, was described by the report's authors as saying that the industrial crypto mining market "doubled in size" in 2023.
According to BitRiver, local Bitcoin miners earned a total of roughly BTC 54,000 in total last year.
Russia "continues" to be one of the major global cryptocurrency mining powers, according to the company.
Furthermore, according to BitRiver, "over 95%" of Russian miners' "computing resources" are being utilized for Bitcoin mining.
Contrary to the reported growth projections for the Russian crypto mining industry, Roman Nekrasov, the Co-founder of the Encry Foundation, expressed a different perspective. He stated that in his view, Bitcoin (BTC) constitutes approximately 90% of the mining activities in Russia. Nekrasov mentioned that the remaining 10% of Russian miners concentrate on alternative cryptocurrencies such as Litecoin (LTC) and Kaspa (KAS).
Market Is Mostly Unregulated Still
Russia currently does not have a legal position for mining. But many in Moscow have suggested outlawing cryptocurrency in all its forms.
Miners demand that legislators "hurry up and legalize" their industry, even if it means they have to pay taxes on their profits.
The Energy Ministry has proposed requiring miners to switch off their rigs for a predetermined period of time each year in order to relieve the strain on overloaded grids.
According to reports, the most recent legislative measures either call for limiting private mining or giving energy companies the authority to penalize suspected "home" cryptocurrency miners.
Reduced Power Expenses Increase Growth Potential
Lawyers offered their opinions. They informed the writers of the paper that Russia already has laws pertaining to cryptocurrencies and cryptocurrency mining.
A lawyer with Vegas Lex, Elizaveta Vikhlyantseva, pointed out that nothing in Russian law "prohibited" the development of "crypto mining farms."
The head of Rustam Kurmaev and Partners' IT and IP dispute resolution division, Yaroslav Shitsla, stated that "cryptocurrency has already been recognized as property."
Shitsla used the "On Digital Financial Assets" law as support for this assertion. This may be the case, but opponents of the law have referred to it as "lacking in substance."
It seems that the Financial Action Task Force (FATF) concurs. It has reduced Russia's standing compliance rating accordingly.
Despite differing opinions among experts, there remains an overall positive outlook on the growth of crypto mining in Russia. Nikita Vassev, the founder of Terracrypto, emphasized that the rapid expansion of mining in the country is largely attributed to the inexpensive electricity rates. Additionally, Vassev highlighted the favorable climatic conditions in Russia, particularly in Siberia, which provide cost-saving opportunities for miners by minimizing cooling expenses.
Experts pointed out that many existing production facilities in Russia could be easily repurposed for Bitcoin mining operations, contributing to the industry's growth. Furthermore, they noted that the relatively lenient regulatory environment and lack of strict control by local authorities create favorable conditions for cryptocurrency-related businesses to thrive.
May 2024, Cryptoniteuae