Beyond the great wall: Russia is preparing for an influx of Chinese miners

© RIA Novosti / Evgeny to Betemporary in photosangelina cryptocurrency bitcoin conference Russian Blockchain Week 2017 in MoscowBeyond the great wall: Russia is preparing for an influx of Chinese miners© RIA Novosti / Evgeny to Betemporary the image Bank

The issue of cryptocurrencies requires a lot of energy. In China, where it is concentrated up to 80 percent of the global capacity for the mining, solved the problem radically, effectively prohibiting this type of economic activity. What may be the best mass influx of Chinese miners in Russia at RIA Novosti.

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An interdepartmental working group to study the financial risks on the Internet, which is headed by the people’s Bank of China, recently recommended that the regional authorities use the administrative resource for the gradual closure of mining farms. Among these measures is a restriction of the supply of electricity.

The order of the controller addressed to the authorities of Inner Mongolia, Xinjiang Uygur Autonomous region, Sichuan and from Yunnan.
It is understandable why Chinese miners have chosen exactly these provinces. Here the most suitable conditions for work of the farms: low population density, cold climate and cheap electricity.

As you know, for mining you need a lot of energy. According to the portal Digiconomist, the energy used to produce bitcoins at the end of 2017 40,24 terawatt-hours per year, while in August did not exceed 16 terawatt-hours. Cryptocurrency Etherium, this index in December made up 10.53 terawatt-hours over the last four months it has doubled.

In China today is about four-fifths per cent of the world capacity of mining. The government’s decision to put the miners on a strict diet, partly dictated by fears that their activities will lead to failures in the electricity supply of whole regions of the country.

Now we can expect a mass Exodus of miners from China to other countries, where suitable climate and cheap electricity. Among the most attractive call Russia, Canada, Iceland, and the countries of Eastern Europe.

Some of these countries have joined the fight for Chinese miners. In particular, last week the readiness to accept cryptocurrency «immigrants» announced Canada. For localization of mining farms selected district in Quebec. Here the Chinese have promised affordable electricity prices and loyal attitude of the authorities.

Russian investors seem to see prospects of development of this market and invest in power plants, then to access data centers and mine cryptocurrency. In particular, at the end of last week, the media reported that «Gubakha energy company» (SGC), which owns the power plant in Kizel Perm region with a capacity of 23.6 MW CHP and Sarapul in Udmurtia (10 MW), are considering the option of mining.

However, this project will start only after the formation in Russia the legislative framework for work with cryptocurrencies. It is not excluded that the same forward and miners from China: for them, the important transparent working environment in a foreign country.

The legal vacuum needs to be filled in the coming months: Ministry of Finance develops the law on the regulation of cryptocurrencies in Russia. Miners have to bring out of the shadows, to register as individual entrepreneurs or legal entities to pay taxes.

In the Russian Association of cryptocurrency and blockchain (RAKIB) has a Committee of market participants are hashing. Included the representatives of China and Slovakia are preparing proposals to improve the investment attractiveness of mining in Russia, told RIA Novosti President RAKIB Yuri Pripachkin.

«Mining, as the industry is already there, and she will, until someone will come up with something more efficient but equally secure and anonymous. Now the authorities should take care of creation of conditions for the most fair play in the market», — the expert believes.

The arrival of miners from China to Russia with proper and honest regulation may significantly replenish the regional and Federal budget. In RAKIB calculated when you load 100 GW of spare capacity of Russian energy companies attracted investments in the economy of the country can reach 1.7 trillion rubles a year.