The Russian government sees bitcoin mining as a threat to its electrical grid

The deputy head of the executive cabinet of the presidency of the Russian Federation, Maxim Oreshkin, considered that the electricity shortage may affect the Russian economy in the next 5 to 10 years, due to the development of bitcoin mining. These words were spoken within the framework of “Blockchain FI Day, on the threshold of a new financial era”, a conference organized by Sberbank and held in Moscow, Russia, on November 13.

Oreshkin assured that the Russian economy could be affected in the long term, but that for now the effects of the high consumption of bitcoin mining are observed in Siberia. “Due to the very active development of mining in this region, certain elements of the energy system of the Southern Siberian region have become energy deficient.”

Likewise, Oreshkin predicts that in a “horizon of 5 to 10 years, the problem of electricity shortages will be very serious. The question is: can we create capacity in the new conditions at a price that is competitive for mining?” said deputy chief of the executive cabinet.

Bitcoin mining in Russia is “legal”, but they can ban it

As NoticiasVE reported, Russia “legalized” bitcoin mining. It happened on August 8 when Russian President Vladimir Putin signed legislation which helps to exert strict regulatory control over Bitcoin mining activity in the country.

Concerns regarding electricity consumption and the Russian economy are reflected in this law. According to the Duma (lower house of the Russian federal assembly), the law passed will allow the federal government to ban mining in certain regions from Russia.

As a result of the approval of the law, Evgeny Grabchak, deputy head of the Ministry of Energy of the Russian Federation, commented at the time that “in the near future mining in some regions will already be prohibited at the state level.”

This is due to the electricity problems, which Russia is already experiencing in some deficit areas such as the Far East, southwestern Siberia and the South, where they will not be able to “offer large capacities to anyone in the future until 2030”, not even for mining. bitcoin or any high consumption industry.

Vladimir Putin gives his opinion on bitcoin mining

The Russian president himself emphasized that although Russia is one of the world leaders in mining, contributing around 5% to the world hashrate according to some data, this should not affect the country’s economic balance in other areas. He commented that bitcoin mining is good, “but the construction of housing, industrial and social facilities, the supply of electricity to the production facilities planned for construction is no less important, and perhaps even more important.”

According to a field journalist who traveled to Irkutsk, a city in the Siberian federal district, bitcoin mining in this region is common, even domestically. In that region, he documented the “babushkas” who mine bitcoin. Babushka It is a Russian word used to call grandmothers.

One factor that makes mining in Siberia suitable is the frigid climate, thanks to which the machines avoid high temperatures and overheating. In additionelectricity in the Siberian Federal District is economical.

According to data from July 2024, consumption in rubles per 100 kilowatts per hour (RUB/100 kWh) is 319,710, which at the time of writing is equivalent to $3.20. Other regions of the country pay almost double or more in electricity, such as the areas of Chukotka, Stavropol or Khabarovsk.