Subsidized electricity in Russia is attracting people to mine crypto, causing power outages.
The Irkutsk region of Russia is no stranger to power cuts. Unofficially dubbed the “Mining Capital of Russia”, the cost of electricity here is roughly 6 times lower than the average price of electricity in the country. Consequently, it attracts residents to use this subsidized electricity to mine crypto.
As claimed by the Irkutsk Electric Grid Company (IEGC), the power consumption in the region grew by 108% last year. Local administrators conducted raids in the region to find the cause, which was uncovered to be “Gray Mining”, a term used to specify crypto mining from home. 21 electrical installations were found that were suspected of gray mining.
The rate of electricity in Irkutsk is around 0.86 Rubles ($0.01) per kWh, which is capped at 3.6 Rubles ($0.05) per kWh for small businesses. The enterprise discovered over 1000 crypto mining installations. Wherein there was a case of a single mining farm that consumed over 193,000 kWh electricity, a massive 22% of the total consumption of the village it was located in.
Amidst the growing trend of crypto mining, many are concerned with its impact on the environment. A team of researchers from Cambridge’s Centre for Alternative Finance, led by Michael Rauchs, discovered that mining bitcoin consumes around 121.35 terawatt-hours (TWh) a year. Commenting that “If it (Bitcoin) were a country, it would be in the top 30 power consumers worldwide”, ranking above Argentina.
Amidst these developments in major crypto markets in Asia, we can assume there’s a fair chance crypto gets regulated in Russia.