The Russian cryptocurrency mining industry is experiencing significant expansion, as the need for mining equipment has nearly tripled within the past year. What factors are driving this swift increase?
Based on a recent update from the Russian news agency PRIME, there was a threefold surge in the need for industrial mining equipment and services during the last quarter of 2024 when compared to the corresponding quarter in the previous year.
As a crypto investor, I’ve observed a remarkable growth in the sector, coinciding with the legislative changes initiated by President Vladimir Putin in the summer of 2024. Now, under the new regulations effective from November 1, 2024, I can legally engage in cryptocurrency mining, provided my business or individual entrepreneurship is duly registered within the national miners’ registry.
Under the latest rules, businesses and individual entrepreneurs may participate in mining activities once they’ve registered with the government system. Individual miners don’t need to register if their monthly energy usage remains below 6,000 kWh. But, if they use more than this amount, they must legally register as business owners.
Sergey Bezdelov, head of the Industrial Mining Association, pointed out that these regulatory changes not only provide clear guidelines for mining operations, but they’ve also solidified mining as a dependable revenue stream. Consequently, this boosts the industry’s growth potential and increases its credibility within the economic sphere.
As the energy sector expands, the Russian administration is implementing fresh regulations aimed at controlling energy use across different industries. A proposed bill from the government suggests a prohibition on mining activities in specific areas starting from January 1, 2025, lasting until March 15, 2031.
This ban is likely to impact regions like Dagestan, Chechnya, and Ingushetia, plus certain spots within Irkutsk, Buryatia, and the Zabaikalsky Krai, particularly when there’s high energy usage.
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The ban will have consequences in areas such as Dagestan, Chechnya, and Ingushetia, along with specific locations within Irkutsk, Buryatia, and the Zabaikalsky Krai, especially during periods of intense energy consumption.
The authorities have pointed out energy scarcity and price imbalances as the primary causes for these limitations. In areas where electricity is affordably priced, miners have been placing an enormous burden on local power systems. Additionally, Russia imposed a 15% tax on Bitcoin mining earnings starting November 18, 2024.
Experts like Bezdelov recommend that investors might want to devote around 5% of their investment portfolio towards cryptocurrency mining. To him, this approach seems promising as a means of diversification, potentially providing lasting profitability and gains, despite the unpredictable nature of the crypto market.
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2025-01-13 11:08