"Russia is Trying to Build a Major Bitcoin Mining Industry to Compete With China
Alexander Drozdenko, the governor of the Russian Leningrad region, has encouraged bitcoin miners to create, develop and deploy mining centres in Leningrad at the third annual Energy of Opportunities conference.
Earlier this year, several trusted sources including Bloomberg revealed that Russian President Vladimir Putin’s Internet advisor has been planning to launch an initial coin offering (ICO) campaign for a project called Russian Miner Coin (RMC) with a long-term vision of competing with the Chinese bitcoin mining industry and large-scale bitcoin mining equipment manufacturers such as Bitmain.
At a news conference, Putin’s aide Dmitry Marinichev announced his plans to raise over $100 million to establish a bitcoin mining centre and a manufacturing line to produce ASIC miners. He stated:
Marinichev further emphasized the importance of Russia’s cheap electricity and explained that with lower costs, Russian mining centres would be able to compete with key players in the global bitcoin mining industry like Bitmain.
However, analysts remained sceptical regards to the model of RMC and the vision of Marinichev as Bitmain has recently raised $50 million from leading venture capital firms IDG and Sequoia. In an interview with Bloomberg, Bitmain representatives revealed that the company is valued at several billion dollars, which if true, would make Bitmain the most valuable company in the global bitcoin industry ahead of Coinbase.
It will be a challenge both financially and technologically for new companies like RMC to compete with Bitmain even with massive capital because Bitmain has remained as the leading bitcoin mining equipment manufacturer in the global mining market for the past three years and to create a replica of a mining equipment manufacturing line would require hundreds of millions of dollars.
But, RMC and the Russian mining industry could compete with China if the Chinese government decides to heavily regulate and restrict the bitcoin mining industry. Although key figures such as Bitmain co-founder Jihan Wu have noted in the past that a ban on bitcoin mining in China is highly unlikely, recent reports suggest the Chinese government is actively considering the potential of restricting its bitcoin mining sector.
If China does restrict bitcoin mining operations and provides a difficult ecosystem for local miners, regions like Russia could evolve into a major bitcoin mining market especially with the help of the government and with efficient regulations. While it is unlikely that the Chinese government will restrict its mining market, if emerging mining equipment manufacturers and miners in Russia can match the Chinese market concerning technology and has power, there exists a possibility of Russia evolving into a major mining market in the future"
Author : Joseph Young
Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.