...By Henry George for TDPel Media.
Russia has reportedly surpassed Kazakhstan and the United States in Bitcoin (BTC) and cryptocurrency mining, ranking second globally, according to BitRiver.
The company provides colocation services for cryptocurrency mining operations and revealed that in the first quarter of 2023, the Russian Federation achieved a new milestone by reaching 1 gigawatt (GW) of power involved in mining.
United States Maintains Top Position
The United States remains the leader in cryptocurrency mining, with a mining capacity of 3-4 GW.
Other countries in the top 10 list include Gulf countries with 700 megawatts (MW), Canada with 400 MW, Malaysia with 300 MW, Argentina with 135 MW, Iceland with 120 MW, Paraguay with 100-125 MW, Kazakhstan with 100 MW, and Ireland with 90 MW.
Lack of Clear Cryptocurrency Regulations in the United States
Although the United States has a higher mining capacity than Russia, the lack of clear regulations regarding cryptocurrencies in the country may lead to a potential market distribution shift.
The Cambridge Center for Alternative Finance’s report shows that at the end of 2021, Russia was ranked third in cryptocurrency mining, surpassing both the United States and Kazakhstan in terms of bitcoin mining capacity.
In January 2022, the country ranked fifth.
Bitcoin Mining Process
Bitcoin mining is the process of validating digital transactions on the Bitcoin network and adding them to the blockchain ledger.
It is done by solving complex cryptographic hash puzzles to verify blocks of transactions that are updated on the decentralized blockchain ledger.
Reason for Positive Trend in Mining Capacity
Experts at BitRiver attribute the positive trend in mining capacity to the restrictions imposed on mining activities in Kazakhstan and China due to electricity shortages.
Kazakhstan signed a law on digital assets on February 6, 2023, that regulates cryptocurrency mining in the country.
The new legislation will provide a sense of security for mining industry players to plan their operational and financial activities, execute major projects, draw investments, and advance related sectors of the Russian economy, specifically the electric power and information technology industries.
The increasing interest and investment in Bitcoin mining in Russia could have significant economic implications for the country, particularly in the electric power and information technology industries.
However, the lack of clear cryptocurrency regulations in the United States may lead to a potential shift in the market distribution of cryptocurrency mining.
Kazakhstan’s new legislation on digital assets could be a model for other countries seeking to regulate the cryptocurrency industry.