If Leonard Cohen were to write a song about the current crypto market, it would probably have been entitled “Everybody Knows”. Indeed, everyone who has had ever a single brush with the crypto industry knows that it stands on the pillar of mining. Mining — the technological activities that keep blockchain networks running, coins flowing and transactions passing through the bottlenecks of gateways. But everyone who has had a brush with the crypto industry also knows that mining is a highly power-intensive process requiring immense processing power that is not always being efficiently used.
Mining is not entirely efficient for a banal economic reason — electricity costs. The US, Europe and other countries popular with mining are by far from friendly jurisdictions for power-hungry mining farms. At 0.350 USD per kWh in Germany, 0.223USD per kWh in the UK and a paltry 0.375USD per kWh in Denmark, mining will be more of an expensive hobby than a source of income. Hence the return to the logical question of where to mine. The answer can be found in the CIS, where electricity is much cheaper than in the US, Europe, Latin America and many other hi-tech countries combined. Russia leads in the price charts at 0.066USD per kWh, followed by Kazakhstan at 0.056 USD and Uzbekistan at 0.028USD. The reasons for low electricity costs can be traced to a large number of nuclear and hydroelectric power plants that are being built to feed the insatiable energy hunger of these economies, and the immense amounts of natural resources that are being extracted in the Russian Federation. As such, the CIS has become a popular destination for many entrepreneurs willing to start their mining farms.
But there are other reasons why the CIS is attracting miners. The main limitation of hardware that industry giants are still and will never be capable of eliminating is the process of heat generation. Russia’s cold climate needs no introductions and is a natural solution to saving expenses for cooling of mining equipment. The Siberian wastes and Russian far north are popular destinations with many hi-tech companies that need natural climate conditions to operate high-powered servers and other equipment.
Another important factor that is attracting miners is the comparatively low cost of labor in the CIS. The favorable labor code regulations and large number of highly qualified specialists in the IT field make Russia a high contender for a prime spot on the list of countries in the CIS attractive for miners. The advent of the blockchain industry has created many jobs in the Russian Federation over the last two years and the popularity of the sector is attracting an ever-growing number of specialists with fitting offers from investors willing to take advantage of the favorable market conditions.
Last, but not the least of the factors making the Russian Federation and the CIS an attractive venue for miners is the lack of strict regulation and harassment by the authorities, as is the case in China. The Russian government has taken a favorable stance towards the blockchain industry and is in no hurry to introduce legislation that would impair it and reduce the value it generates in the form of jobs.
“Everybody knows” is a phrase that seems to be limited by the quintessential and lacking “What exactly”, when it comes to the ins and outs of mining. The CIS is a small answer to the question that has already yielded considerable income for many entrepreneurial investors and is only bound to attract ever more interest as the favorable infrastructure keeps on developing.
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