Irkutsk’s Electricity Consumption Increases as More Russians Take Up Cryptocurrency Mining

Cryptocurrency mining is being blamed for a spike in electricity demand in residential areas of the Russian city of Irkutsk. Mine-laden planes continue to land in the area, despite China’s embargo, and incidents of hardware theft have risen sharply.

Irkutsk’s Rising Electricity Requirements.

The Russian region of Irkutsk has recorded a fourfold rise in electricity use by the population in 2021 compared to the previous year, blaming amateur crypto miners for the surge. When asked about the rising cryptocurrency prices and China’s mining ban by Tass, Irkutsk Electric Grid Company Director for Development Evgeny Vechkanov said they were to blame.

The CEO of Baikal Energy Company, Oleg Prichko, admitted that “grey” mining is mostly to blame for the growth. Commenting on its expansion, he stated that seven Boeing-737s laden with currency minting equipment landed in Irkutsk alone in the first part of January. “A lot of trucks are transporting equipment from China that’s not needed there because of the ban. Prichko noted that “practically free equipment” is moving to the Irkutsk region.

According to the article, several people of the Irkutsk Oblast have set up mining farms in their houses and dachas. As a result of the increased demand on the electricity grid, outages and blackouts are becoming more frequent. They claim that these miners are actually doing business, but they continue to pay household rates for the electricity they use. Tariffs in rural regions of Irkutsk start at just $0.01 per kilowatt hour, four times less than commercial rates.

There has also been an increase in the number of theft cases involving mining rigs. 344 such crimes were reported in the area in the previous year. More than $2.1 million (160 million rubles) in damages were incurred. So far, 54 cases have been successfully closed by law enforcement, and 66 criminals have been brought to justice. It was estimated by the chief of the Irkutsk Regional Criminal Investigation Department, Andrey Zhbanov, that in the year 2021, such crimes will be perpetrated virtually every day.

As a result of China’s ban on cryptocurrency mining, Russia has seen a substantial rise in its prominence as a mining hot zone. Russian mining capacity was placed third by the Cambridge Center for Alternative Finance in a research conducted in August of last year, with a share of the global bitcoin hashrate of almost 11%.

In Russia, mining is a profitable enterprise and a source of extra income for many people. Moscow officials have supported the notion of classifying it as an entrepreneurial activity, which would allow it to be taxed and hike electricity bills for both mining businesses and individual miners. Meanwhile, Russian energy providers have recommended measures to limit the use of home mining.

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