Russian region struggles to keep up with Bitcoin mining energy demands

0
144

With the proliferation of cryptocurrency mining in Russia, a local region is struggling to maintain its stability amid a massive influx of new cryptocurrency mining operations.

In Russia’s Irkutsk region, a federal region and a major hub for trade routes from China, local news agency TASS reported Wednesday that energy consumption quadrupled in 2021 due to mining.

Evgeny Vechkanov, head of technology and development at the local energy company Irkutsk Electric Grids, attributed the rapid growth in cryptocurrency mining to a significant rise in cryptocurrency in 2021, as well as the imposition of a ban on cryptocurrencies in China in September. “These factors have exacerbated the situation and led to a fourfold increase in energy consumption compared to 2020,” he said.

Vishkanov added that local residents are installing crypto-mining on a large scale at home and in vacation homes, which leads to increased energy consumption and frequent power outages.

Oleg Brchko, director of Baikal Energy, also attributed the increase in energy consumption to the growing popularity of domestic mining. He claimed that during the first two weeks of January, as many as seven Boeing 737s arrived in Irkutsk “fully loaded with miners from China”.

Andrei Chbanov, head of the investigation department of the Interior Ministry Directorate, said that some Irkutsk residents set up kennels for dogs. “Laugh as much as you want, but the dogs are hot,” he said. “Mining generates a lot of heat, which creates a double benefit.”

The latest report comes months after the Irkutsk authorities first reported a sharp increase in energy consumption in October 2021, linking the increase to the massive increase in mining due to the exodus of miners from China. The Russian Energy Ministry earlier announced that it is working on a new price differentiation structure between public use and cryptocurrency mining by the end of 2021.

On the topic: According to the Kremlin, there is a cryptocurrency worth $200 billion in Russia

Irkutskergospet, a large local electricity distribution company, has reportedly filed a total of 137 lawsuits against customers who use subsidized electricity to mint cryptocurrency at mining facilities installed in basements and garages. The company is reportedly looking to recover 63 million Russian rubles ($820,000) in compensation.

The news came shortly after Russian President Vladimir Putin announced that Russia’s electricity surplus gave the country a “competitive advantage” in crypto mining. In November 2021, the Russian State Duma created a working group to work on regulations specifically developed for the crypto mining sector.

Source: CoinTelegraph

LEAVE A REPLY

Please enter your comment!
Please enter your name here