Crypto mining faces permanent ban in Irkutsk's plans
In the heart of southern Siberia, Irkutsk has become a hotspot for Bitcoin mining in Russia. With abundant hydroelectric power from Lake Baikal, the region has attracted miners since 2021, contributing to a 28% increase in electricity consumption over the past five years.
However, this digital gold rush has put a strain on the power grid. The regional government of Irkutsk, along with Zabaykalsky Krai, recently imposed a year-round mining ban due to the critical deterioration of the electricity grid situation. Similar requests have been made by local authorities in other Russian regions, such as Buryatia and Transbaikalia, leading to winter bans in these areas as well.
The power shortages are not unique to Irkutsk. Many other regions in Russia, including Dagestan, North Ossetia, Ingushetia, Chechnya, Kabardino-Balkaria, and Karachay-Cherkessia, also struggle with power shortages, particularly during the winter months.
Uncontrolled Bitcoin mining has been identified as a major factor pushing power supplies to their limits. Last year, President Putin voiced his concerns about the electricity consumption of miners, and the government-critical Moscow Times claimed the government is looking for a scapegoat for the outdated power grid in Dagestan.
Despite the challenges, the Rosseti group, Russia's state-owned power company, recognizes Bitcoin mining as a useful tool for utilizing excess capacity. In 2023, Russia mined 54,000 bitcoins, or one in six coins, making it a significant player in the global Bitcoin mining scene.
However, the future of Bitcoin mining in Irkutsk is uncertain. The region is considering extending the ban on Bitcoin mining due to alleged power grid overloads. Miners in the sparsely populated north of the region are exempt from the ban, but the impact on the overall power consumption remains a concern.
If no action is taken, the power deficit is expected to reach 2.9 gigawatts by 2030 in Irkutsk. This underscores the need for a balanced approach that supports the growth of the Bitcoin mining industry while ensuring the stability of the power grid.
In the meantime, other regions in Ukraine, such as Luhansk, Donetsk, Zaporizhzhia, and Kherson, have also imposed restrictions on miners during the winter to conserve power. As the global demand for Bitcoin continues to grow, the challenge for Russia will be to find a way to harness this digital gold rush while ensuring a steady supply of electricity for its people.
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