BitcoinBusiness & Finance

Russia Looking Forward to Conquer the Bitcoin Mining Industry

Although China is the crypto mining hub, several other countries are also showing interest in the mining industry. Recently, the Russian mining company dubbed Russian Mining Company (RMC), belonging to internet ombudsman Dmitry Marinichev, announced its plan to open a mining farm and take over about 20% of bitcoin mining in the world.

Previously, the company was sanctioned so it couldn’t sell its products to the United States. Since then the aluminum plant was of no good to anyone which explains why Marinichev is motivated to use the space for a profitable prospect. Elaborating on how bad the ex-Rasul facility had become, Marinichev stated:

Now the factory is unprofitable for Rusal, the electricity supplied to it is barely utilized, and people living in the single-industry town near the plant have nowhere to work.

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However, now, the company will be installing all the necessary machinery and equipment required for bitcoin mining at Nadvoitsky Aluminum Plant (NAZ) located in Karelia. According to an estimate, the expected monthly revenue for the company after setting up the facility is around $100 million. Explaining the plans for the future, Marinichev said:

Our idea consists of converting the factory and selling its computer power as a service, that is to say, offering IT services.

Bitcoin mining is a process where miners deploy computing power to the bitcoin network and get rewarded for validating transactions on the bitcoin blockchain. As miners have to bear electricity costs and other expenses for mining, they are awarded bitcoins upon the successful addition of a block to the blockchain, this explains why the profitability of the mining industry is highly dependent on the price of bitcoin.

The president of the Russian Association of Cryptoeconomics and Blockchain (RACIB), Yuri Pripachkin, is of the view that electricity costs get to decide if bitcoin mining is profitable for participants i.e miners. In this regard, Pripachkin said:

In Moscow, electricity prices are quite high, and only because of this, the placement of mining equipment in another place may turn out to be more profitable.

While Russia accounting for only about 10% of bitcoin mining in the world is looking to almost double its participation, there are several hurdles that might prevent RMC from achieving its goal. At the moment there are already several mining giants active in the mining industry such as Bitmain and Canaan Creative which have moved way ahead and even applied for initial public offering (IPO). RMC has to catch up with the fast pace of its competitors to fulfill its goals on time.

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Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: shehryar@blockpublisher.com or contact the editor at editor.news@blockpublisher.com

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