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Electricity distributors in the Russian province of Irkutsk have seen increased home electricity usage that they attribute to cryptocurrency mining. Planes carrying banned Chinese mining machines keep landing in the area, and incidences of gear stealing have considerably surged.
Irkutsk Faces Increasing Electricity Demands
Companies ensuring the electricity supply in the Russian area of Irkutsk have recorded a 4-fold rise in household usage in 2021 compared to the last year, accusing rookie cryptocurrency miners of the surge. According to Tass, Evgeny Vechkanov, Irkutsk Electric Grid Company’s Director for development, cited high cryptocurrency costs and the banning of cryptocurrency mining in China as the key factors.
The development is primarily due to “grey” mining, according to Oleg Prichko, the Baikal Energy Company’s CEO. He claimed that 7 Boeing-737s laden with cryptocurrency minting equipment landed in Irkutsk merely during the first half of January, remarking on the growth. Due to the embargo, several trucks deliver machinery from China that isn’t required there. Prichko went on to say that “virtually free material move to the Irkutsk area.
Several Irkutsk locals have established mining fields at their residences and dachas, according to the statement. The electricity grid is increasingly overburdened, resulting in frequent outages and burnouts. Russian officials maintain that these miners are committed to legitimate economic activities, even though they continue to pay residential rates for the power they consume. Costs in remote regions of Irkutsk begin at just $0.01 per kilowatt-hour, which is roughly 4 times less than industrial tariffs.
Furthermore, the number of instances involving mining rig stealing is also on the rising trend. Three hundred forty-four similar incidents were reported in the area in 2021. The total loss was 160M rubles (over $2.1M). Thus far, fifty-four cases have been handled, with sixty-six criminals being taken to trial. According to Andrey Zhdanov, the head of the Irkutsk Regional Criminal Investigation Department, such felonies were perpetrated frequently in 2021.
Russia and Mining
Because the Chinese authorities initiated a national drive on cryptocurrency mining, Russia’s role as a mining hub has grown substantially. According to the Cambridge Center for Alternative Finance report, by the end of 2021, Russia’s portion of the worldwide BTC hash rate had surpassed eleven.
In Russia, cryptocurrency mining is a lucrative industry that also provides an extra source of cash flow for several regular Russians. Its regulatory identity is unknown, but several politicians in Moscow support the notion of classifying it as a business activity, allowing the state to tax it and boost power costs for mining corporations and private miners. Similarly, Russian electricity companies have suggested regulations to limit residential mining.
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