Category Archives: Irkutsk

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Siberian Church Turns to the Power of Crypto In Mining Gaff

A church in Irkutsk, Siberia’s largest state, has been taken to court for draining too much power from the local grid through crypto mining.

Crypto mining in itself is not illegal and Russian law permits reduced power rates for non-government organizations. But, it seems that the church decided to go beyond covering essential heating and lighting and raised extra funds in their own way through crypto mining.

Most churches fundraise for essential repairs, but it seems as though someone in this parish had their own particular use for the extra generation of cash raised by their mining activities. It is not clear if members of the clergy or someone in the parish had locked into the church’s power supply, but the court found for the power company that no case of power theft was suggested, which does indicate that the irregular use of power may have been authorised by the church.

The result means that the church has a tab of $16,000 to pick up and faces their tariffs being raised by the electricity company. More importantly, the case may set a precedent in the courts for future such incidents when excess power is drawn without consultation with local electricity providers. Although not currently legislated for, extreme overuse of power through crypto mining may invite closer government scrutiny if it became a common occurrence.

The cold climate, particularly in locations such as Siberia with its sub-zero temperatures, has made the likes of Russia and Iceland the go-to destinations for industrial level crypto mining. The Russian Association of Crypto Industry and Blockchain (RACIB) claims that there are now over 400,000 people employed in the sector. 70,000 enterprises operate hundreds of thousands of mining rigs, with an increase in one-man operators working from their homes.

Because much of Russia’s mining proceeds go towards foreign investment, locally run mining pools are becoming popular as a way of cutting back on the amount of Russian money going towards overseas enterprises through crypto mining.

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Conditions of Eastern Siberia Appeal to Crypto Miners

The economic region of Russian Eastern Siberia is appealing to cryptocurrency miners, offering cheap electricity to enhance the already attractive features of a cool climate and close proximity to China that the area offers.

Cryptocurrency mining is a cost-intensive process, with electricity bills consuming a large chunk of profits, alongside equipment updates and space cooling systems. In Irkutsk, one of the largest cities in Eastern Siberia, consumers pay just one Russian ruble per KWh, the equivalent of USD 0.016. It currently requires approximately 20,000 KWh to mine one Bitcoin, totaling an energy expenditure of around USD 350 in Irkutsk.

Bitcoin is valued at USD 9,013 at the time of press, meaning that the costs lost on electricity is considerably lower than in places such as London, where a unit of Bitcoin consumes USD 3,650 of electricity to be mined. While commercial prices in Irkutsk can be relatively higher, it is still a far cheaper alternative than most other locations.

The cold climate of Eastern Siberia also provides a free alternative to cooling systems for ASIC units.

While the Chinese border lies just 1,500 km away, the close proximity economically benefits mining businesses that require new equipment on an annual basis. The location enables faster and cheaper delivery services, crucial for widescale mining projects that require the most up-to-date equipment to stay competitive.

These prime conditions are drawing in both local and international investors who are looking to enter the mining business.

Estonian Minery Global and Russian Minery.ru

As reported by local news outlet Interfax, Estonian Minery Global and Russian Minery.ru already have plans to institute five industrial complexes to the region in October to be utilized for cryptocurrency mining.

The two companies plan to locate the mining farms close to the IrkutskEnergo hydropower station, with a total project capacity of 55 MWH. All of the electricity will be provided by IrkutskEnergo via contracts with Bratsk Grid Co, with project plans indicating that the electricity costs will average at a price of USD 0.07 per KWh. Comparatively, the average cost of electricity in the US is USD 0.12 per KWh.

Final licenses and permits are still being pursued by project managers, with construction planned to begin in May once everything is approved. The companies are offering hosting services to any potential miners upon completion of the project.

It was recently reported that Georgia held the position as the second most active country for cryptocurrency mining, holding several similar attributes of Eastern Siberia including a cold winter climate and relatively cheap electricity costs.

 

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