Russia has now become the second largest country in the world for bitcoin and cryptocurrency mining, with the United States maintaining its lead. However, the lack of clear regulations on cryptocurrencies in the United States could lead to potential changes in market distribution.
According to Kommersant, the company BitRiver, which provides hosting services for cryptocurrency mining operations, said that in the first quarter of this year, the Russian Federation reached a new milestone, ranking second in the world in terms of mining capacity, reaching 1 GW (gross weight) .
A graph showing the global Bitcoin mining share. Source: CCAF
The United States maintains its lead with 3-4 GW of mining capacity, followed by other top 10 countries such as the Gulf States with 700 megawatts (MW), Canada with 400 MW, Malaysia with 300 MW, and Argentina with 135 MW watts, Iceland 120 MW, Paraguay 100-125 MW, Kazakhstan 100 MW, Ireland 90 MW.
According to data reported by the Cambridge Center for Alternative Finance, Russia will rank third in cryptocurrency mining by the end of 2021, surpassing the US and Kazakhstan in bitcoin mining capacity. In January 2022, the country ranked fifth.
Bitcoin mining is the process by which Bitcoin transactions are digitally verified on the Bitcoin network and added to the blockchain ledger. It does so by solving complex cryptographic hash puzzles to verify updated blocks of transactions on a decentralized blockchain ledger.
Experts at BitRiver attribute the positive trend in mining capacity to restrictions on mining in Kazakhstan and, previously, China. On February 6, 2023, President Kassym-Jomart Tokayev signed a law on digital assets to regulate cryptocurrency mining in Kazakhstan. The core of the law will come into force on April 1, 2023.
The new law will provide mining players with a sense of security to plan financial and operational activities, implement large-scale projects, attract investment and promote industries related to the Russian economy, especially electricity and information technology, the report said.
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As reported by Cointelegraph