According to unofficial sources, Russia has become the second largest nation in the world in the field of Bitcoin mining, becoming the top contributor of hashrate after the United States.
The news comes following a strategic investment by the country, which has decided to build a large mining farm in Ethiopia and aims to expand in the cryptographic sector.
In Russia’s plan, there is also a regulatory advancement that can liberalize Bitcoin, mining, and exports.
A Russian minister would also like to start considering Bitcoin as a rare commodity, similar to natural gas.
All the details below.
Russia shortens the distances with the United States and becomes the second largest producer of hashrate in Bitcoin mining
Russia has made significant progress in the Bitcoin mining sector in recent months, starting to heavily invest in hardware to transform the country into a global mining hub.
Just now, the last project of the Russian supplier BitCluster has been completed, which had planned to build a huge 120 megawatt (MW) data center in Ethiopia, with a facility that extends over 30,000 square meters in the capital Addis Ababa, near the boundaries of the Kilinto high voltage substation.
The data center built by BitCluster meets the most advanced requirements of modern mining devices, enjoying uninterrupted power supply and 99% uptime.
Most of the energy used to mine Bitcoin comes from the “Grand Thiotian Renaissance Dam” dam, which with a capacity of 5.15 GW represents the largest hydroelectric project ever undertaken in Africa.
According to unconfirmed rumors, with the construction of this latest mining farm, Russia becomes, in all respects, the second global superpower in Bitcoin mining, surpassing China, Kazakhstan, Canada, and coming into close contact with the United States.
According to the latest data provided by the “Bitcoin Mining Council“, Russia was the fifth largest country in terms of hashrate in January 2022, with a 4.66% influence.
The attempt of expansion of Russia in the cryptographic sector comes hand in hand with a strong change in the regulatory landscape of the country that is trying to liberalize bitcoin.
In particular, a few weeks ago the Ministry of Finance publicly declared its intention to treat cryptocurrency as a valuable asset, becoming one of the major producers and exporters in a similar way to what happens with natural gas.
The Russian Central Bank has always expressed its negative opinions towards bitcoin and its network, but this time it has hinted that it will not hinder ongoing work.
The legalization of digital currencies could therefore come with a new draft law, just as Russia unexpectedly becomes the second largest producer of mining computational power.
With a clear legal status, companies and individuals can expand their mining operations with security, contributing to the growth of the cryptocurrency sector in Russia.
Now the growth recorded by the Soviet country could soon be taken as an example by other nations, which will begin to believe more in the advantages offered by bitcoin mining.
The global impact of this decision could potentially shape future policies and regulations, creating a more cohesive and standardized framework for the evolving world of digital resources.
Total network hashrate growing ahead of April’s halving
As Russia prepares to compete with the United States for the role of global leader in cryptocurrency mining, the Bitcoin network is gearing up for its fourth halving that will halve mining rewards for miners in April of this year.
This effectively reduces the number of BTC that can be mined by 50%, eliminating a substantial portion of the supply that would potentially flood the market, but at the same time limiting the miners’ profits.
Anyway, despite the lower extraction power, Russia, along with other major players, is pushing to obtain an increasingly higher share of computational power.
The total hashrate of the bitcoin network, in preparation for this epochal event that occurs every 4 years, is continuously growing and recently reached a new all-time high of 597 EH/s.
With the increase of contenders in the race for digital gold, the difficulty with which this cryptocurrency can be mined from the cryptographic network also increases.
With a current estimated “difficulty” of 75.5T, it is already difficult to emerge as one of the top miners in a highly competitive and exacerbated context due to the centralization towards mining pools that control the majority of the generated blocks.
In addition to all this, in the coming days, precisely on February 15th, there will be yet another adjustment of the network difficulty, which will bring the metric to 82.52 T, as the production of each block has been 0.85 minutes ahead of the average target time of 10 minutes in the last two weeks.
The continuous growth of bitcoin’s hashrate despite the planned halving of mining rewards is partly justified by the price increase recorded by BTC in the last 14 months, which has boosted miners’ final profit.
On the other hand, a great contribution has been made by the advent of the Ordinals, which has helped to increase miners’ fees, pushing for an extra gain in block extraction, which, according to protocol rules, will always remain fixed and will be halved every 4 years.
By the end of 2023, this trend has led to average transaction fees on the network exceeding $30.
Source: https://en.cryptonomist.ch/2024/02/12/russia-invests-in-bitcoin-mining-and-becomes-the-second-superpower-in-the-world-in-terms-of-computing-power/