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.