China has dominated the bitcoin mining industry for a couple of years, but fears of a government clampdown are signaling now might be the best time to enter the market elsewhere in the world. And someone just made a big bet that Russia, with its cold weather and plentiful fossil fuel energy sources, is the place to establish a mining venture.
Businessman Aleksey Kolesnik has bought two electric power stations in Russia specifically to be used for bitcoin mining, the Russian business daily Kommersant reported. This is the first time someone bought a whole power station specifically for mining a crypto asset.
One power station is located in the nearby Russian Republic of Udmurtia and the other is located in the Perm region, on the western slopes of the Middle Ural Mountains. The two facilities will eventually house a data center and a bitcoin mining farm, the newspaper reported. The deal was completed for an estimated 160 million rubles (worth approximately $2.8 million).
The buyer said that cryptocurrency mining operation will only start after the Russian government approves a needed law to make it completely legal. The bill the Russian Ministry of Finance is currently drafting to regulate cryptocurrency and ICOs in Russia is expected to be adopted in March 2018.
In December, the Russian Duma hosted a global panel of cryptocurrency miners where people from fifteen countries explained to parliamentarians how cryptocurrencies are created and discussed different approaches to mining regulation. Some Russian politicians also think that bitcoin can help the country bypass Western financial sanctions. Lastly, a common mainstream media criticism of mining at the moment is that it wastes a lot of energy, supposedly exacerbating global warming.
Chinese miners appear to be preparing for an exodus from their homeland after regulators are hinting at a coming crackdown. As efficient mining requires cheap electricity and cold weather, locations that offer both are said to be the main benefactors, from Iceland to Canada. But, there are reasons to believe that the Russian government will be more open than others to hosting bitcoin mining operations in their territory.