Russian revenues from the minting of bitcoin saw a multifold increase in the past few years before declining significantly since this past spring. The findings come from a new study which also established that the sector was growing during both ups and downs in the crypto market.
$1.4 Billion in Turnover Expected From Russia’s Bitcoin Mining This Year as Business Shrinks
The revenue from bitcoin mining in Russia has increased 18 times between 2017 and 2021, according to a new report by computing hardware distributer Intelion Data Systems, quoted by RBC Crypto. During the period, the total grew from 7 billion rubles in first studied year (below $114 million, at current exchange rates) to 128 billion rubles in the last (over $2 billion).
According to the research, in the past eight months the bitcoin mining revenue has dropped to just over 57 billion rubles ($929 million), despite a fairly confident start to 2022. The second quarter of the year is actually considered by experts to be the worst in over a decade of observation.
Russia controlled 4.66% of the monthly global hashrate as of January 2022 but its share has been shrinking as Russian miners were later hit by U.S. sanctions imposed over the war in Ukraine. Taking into account these indicators, the expected annual turnover in the segment this year is approximately 85.59 billion rubles (less than $1.39 billion).
Nevertheless, mining activities in Russia during the past five years as a whole have yielded significant results in terms of growth dynamics, the analysts point out. Since 2017, when the popularity of this type of business started to increase exponentially, the revenues in the sector have been increasing at a fast pace for the better part of that period, regardless of the crypto market ups and downs.
According to the CEO of Intelion Data Systems Timofey Semenov, the expansion potential of crypto mining in the Russian Federation is huge and could have a significant impact on the Russian economy. It can also help the vast country to deploy its own IT infrastructure and attract investments in its energy-rich regions.
Another study conducted earlier by Semenov’s company revealed that data centers minting digital currencies now use 20 times more electricity than five years ago. The total energy consumption in the sector has reached that of agriculture, the authors said in August.