Russia now the second largest Bitcoin mining nation after US: Report

As per the reports, Russia has become the second largest country across the globe for cryptocurrency and Bitcoin mining. However, the United States continues to be the leader in this space. Meanwhile, other heavyweights in this field include Canada, Gulf nations, Malaysia, Kazakhstan, etc.

Regulatory uncertainties behind this shift? 

The Russian Federation’s Bitcoin mining capacity has reached 1 gigawatt (GW), as per BitRiver, Russia’s largest mining provider. It must be noted that the US boasts of a mining capacity of 3-4 GW, the Persian Gulf with 700 MW, and Canada with 400 MW, while Malaysia's mining capacity is at 300 MW.

The said figures are reportedly based on data gathered between the first quarter of 2023. Interestingly, the nation’s recent achievement can also be attributed to the regulatory uncertainty across the US crypto industry, which may give rise to a new redistribution of the Bitcoin mining market.

Here, it must be pointed out that the Biden Administration has proposed taxes equal to 30% of the costs of electricity used in digital asset mining operations. If this is approved, the tax would come into force next year, with a spaced-out implementation schedule with a rate of 10 percent in year one, 20 percent in year two, and 30 percent thereafter.

Further, the American mining industry is facing headwinds by escalating electricity prices, reduced profitability and tax issues, as well as over-leveraged mining businesses, states Igor Runets, the CEO of Bitriver. He further mentions that owing to the vast majority of equipment purchased by American miners on credit, several over-leveraged companies are in the process of bankruptcy or have already gone bankrupt. 

Crypto mining is a process of creating new digital coins like Bitcoin, etc., and putting them in circulation.