Miners should pay more for power than households, Russia says

Miners should pay more for power than households, Russia says

As Chinese miners flee the country and reportedly flock to Russia, the country’s Energy Ministry is seeking to charge them more for electricity. The energy minister has proposed imposing higher fees for the block reward miners, a move that would see them recognized as a legitimate business activity.

Russia has become an important player in the global block reward mining game, ranking among the big players in the industry. According to the Cambridge Bitcoin Electricity Consumption Index, Russia is the third-largest home to block reward miners. It reportedly contributes as much as 11% of the global BTC hash rate, ranking behind the U.S. which is the new leader and second-placed to Kazakhstan at 35.4% and 18% respectively.

Russia now wants to charge these miners more than the households. Speaking on the sidelines of the Russian Energy Week, Energy Minister Nikolai Shulginov said that his ministry was working on new proposals that would seek to extract more from the miners. 

“To maintain the reliability and quality of power supply, we believe it is necessary to exclude the possibility of electricity consumption by miners at tariffs for the population,” he stated.

The minister claimed that miners had been gobbling up huge amounts of electricity at the expense of the households.

In the Irkutsk Oblast region, which is located in southeastern Siberia, there have been complaints about the surge of block reward miners who have been cited as the cause of power outages. Governor Igor Kobzev recently complained to the Energy Ministry about the miners, saying that in the past year, energy consumption has shot up by 159% as block reward mining activities increase in the region.

Being one of the biggest regions in Siberia, Irkutsk has attracted a large number of miners, both for its climate and its cheap power which comes from the many hydroelectric power stations. 

One of the big miners that operate in the region is BitRiver, and according to its CEO, it welcomes the proposed changes to the energy rates. Speaking to one outlet, BitRiver CEO Igor Runets said that the company has been paying up to 3 times the rates offered to households.

He remarked, “It is fair and economically sound. Moreover, it will help miners enter the legal field, so the state can take the first step towards regulating the industry, which will ultimately lead to transparency of the entire industry.”

Watch: CoinGeek Zurich panel, BSV is Green Bitcoin: Energy Consumption & Environmental Sustainability

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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