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Jimmy Aki
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Jimmy Aki
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A report published on February 21 indicated that Russia’s Bitcoin mining sector expanded by 7% in 2024, with mining farms reaching a total of 136,600 units.
Despite this expansion, the sector continues to grapple with significant challenges, particularly concerning energy consumption.
Unregulated mining operations remain widespread, exacerbating energy shortages and complicating regulatory oversight.
While the government has taken steps to curb illicit mining activities, many operations remain unregistered, straining the country’s power grid.
Russia’s Bitcoin Mining Capacity Reaches 11 GW Amid Growth and Challenges
A report from Russian newspaper Kommersant highlights Irkutsk as the leading hub for Bitcoin mining, accounting for over 10% of identified farms.
Moscow and its surrounding areas collectively host around 17%, while Bashkiria and Samara remain key mining regions.
Bitcoin mining farms in Russia collectively hold a capacity of 11 GW, though only 3 GW is used by legally registered miners.
For context, one gigawatt equals one billion watts, demonstrating the immense energy consumption required by the industry.
The disparity between registered and unregistered miners underscores the difficulty of bringing the sector fully into the legal energy system.
Illegal Bitcoin mining has taken a financial toll, with Russia’s power grid company Rosseti reporting losses surpassing 1.3 billion rubles ($14.2 million) in 2024.
The North Caucasus recorded the highest losses, with Rosseti Severny Kavkaz suffering damages exceeding 600 million rubles ($6.5 million).
In Novosibirsk, losses reached 400 million rubles ($4.4 million), while Rosseti Center and Privolzhye reported 120 million rubles in damages.
The company confirmed that 130 cases of unauthorized electricity use were detected and shut down, leading to over 40 criminal cases under Russian law.
To tackle the issue, the Russian government has introduced new regulations restricting Bitcoin mining activities in certain areas.
A recent government decree has completely banned Bitcoin mining in 11 regions, effective January 2025.
Additionally, specific areas in Buryatia, the Irkutsk region, and the Zabaikalsky Krai have been restricted from mining activities during the autumn-winter period when energy demand peaks.
Beyond regional bans, Russia’s Energy Ministry has proposed a national registry to track crypto mining rigs and related hardware.
The ministry believes such a registry will improve oversight, mitigate energy losses, and bring more Bitcoin mining operations into the legal framework.
Authorities seek to balance the sector’s expansion with energy sustainability, but the effectiveness of these policies will depend on enforcement and compliance.
Russia Explores Dedicated Power Plants to Support Bitcoin Mining
Russia may soon take a bold step in regulating its growing crypto mining industry by constructing dedicated power plants exclusively for Bitcoin miners.
Aisen Nikolaev, the head of the State Council Commission on Energy, proposed the idea, suggesting that establishing dedicated power plants could help stabilize electricity supply while allowing regulated Bitcoin mining to continue.
Nikolaev pointed out that in certain regions, electricity usage for mining had become uncontrolled, worsening power shortages and affecting overall supply quality.
If Russia moves forward with dedicated power plants for Bitcoin mining, it could mark a turning point for the sector, offering greater oversight and improved energy management while strengthening the country’s influence in the global crypto mining market.
Meanwhile, Bitcoin continues to have a strong upward momentum.
The Bitcoin price is currently trading at $98,716, up 1.54% in the past 24 hours. The cryptocurrency remains above the crucial $98,000 level, signaling firm buyer control.
The rally is fueled by several global factors, including improved U.S.-Russia diplomatic relations and a more lenient approach to crypto regulation by the U.S. Securities and Exchange Commission (SEC).
Additionally, the SEC’s recent approval of a yield-bearing stablecoin and the launch of the Cyber and Emerging Technologies Unit to protect retail investors have further reinforced optimism in the market.
