Russia Rises as the Second Largest Bitcoin Miner
Russia has become the second-largest Bitcoin miner in the world, with the US remaining in the lead, despite regulatory uncertainty in both countries.
Russia has emerged as the second-largest Bitcoin (BTC) miner in the world, according to a new report by Russian news publication Kommersant. The report cites data from Bitriver, Russia's largest mining provider, and notes that the rise to second place comes amid regulatory uncertainty in the US that could soon shake up the rankings.
The ranking is based on power usage involved in crypto mining operations, with the United States remaining in the lead. However, the report suggests that the uncertainty in the regulation of cryptocurrencies in the US may trigger a new redistribution of the market. In contrast, Russia also faces regulatory uncertainty in crypto and the mining industry, as the legal framework for miners has not yet been developed, and sanctions risks are growing.
Despite the regulatory uncertainty, Russia has seen a significant increase in cryptocurrency mining operations, with many taking advantage of the country's abundant supply of cheap electricity. Bitriver CEO Igor Runets has noted that the American mining industry is facing headwinds, including rising electricity prices, reduced profitability, tax troubles, and over-leveraged mining businesses. In addition, many American miners purchased their equipment on credit, leading to bankruptcy or financial difficulties.
The Biden Administration has proposed taxes equal to 30% of the costs of electricity used in digital asset mining operations. If approved, the tax would go into effect in 2024 and have a staggered implementation schedule with a rate of 10% in year one, 20% in year two, and 30% in year three. The proposed tax has raised concerns among American miners, who fear that it could drive them out of business or force them to relocate to other countries with more favorable regulatory environments.
Bitcoin, the world's largest cryptocurrency, is currently trading for $27,467, down by 1.34% in the past 24 hours. Despite the recent dip, Bitcoin has seen significant growth in recent years, with many investors viewing it as a safe-haven asset and a hedge against inflation.
