Russia is becoming the second largest bitcoin mining hub after the US, claims local miner

According to reports, Russia has now become the second largest country in the world in terms of Bitcoin (BTC) and cryptocurrency mining, with the United States maintaining its leading position. Still, the lack of clear regulations regarding cryptocurrencies in the United States may lead to a potential shift in market distribution.

According to Kommersant, BitRiver, a company providing colocation services for cryptocurrency mining operations, said that the Russian Federation reached a new milestone in the first quarter of the year by participating with 1 gigawatt (GW) of power.

Chart showing global bitcoin mining share. Source: CCAF

The mining capacity of 3-4 GW in the United States keeps it at the top, followed by other countries in the top 10 list such as Gulf States with 700 megawatts (MW), Canada with 400 MW, Malaysia with 300 MW, Argentina with 135 MW, Iceland with 120 MW, Paraguay with 100-125 MW, Kazakhstan with 100 MW and Ireland with 90 MW.

According to data from the Cambridge Center for Alternative Finance report, at the end of 2021, Russia ranked third in cryptocurrency mining, surpassing both the United States and Kazakhstan in terms of bitcoin mining capacity. In January 2022, the country ranked fifth.

Bitcoin mining is the process by which bitcoin transactions are digitally validated on the bitcoin network and added to the blockchain ledger. It does this by solving complex cryptographic hash puzzles to verify blocks of transactions that are updated on the decentralized blockchain ledger.

BitRiver experts attribute the positive development of mining capacity to the restrictions imposed on mining activities in Kazakhstan and earlier in China due to power shortages. On February 6, 2023, President Kassym-Jomart Tokayev signed a Digital Assets Law regulating cryptocurrency mining in Kazakhstan. The main part of the law will come into force on April 1, 2023.

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According to the report, the new legislation will give mining industry players a sense of security to plan their operational and financial activities, carry out major projects, attract investments and advance related sectors of the Russian economy, particularly the power and information technology industries.

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