As cryptocurrency mining becomes more prevalent in Russia, one local region is trying to keep power stable in the face of enormous inflows of new crypto mining businesses.
In fact, According to local news source TASS, mining activity in Russia’s Irkutsk Oblast, a federal district and Russia’s principal centre of trade routes from China, increased energy usage fourfold in 2021.
Moreover, the significant rise of crypto mining operations has been connected to the huge crypto surge in 2021. As well as China’s cryptocurrency prohibition. According to Yevgeny Vechkanov, head of technology and development at local energy provider Irkutsk Electric Networks. “These variables aggravated the situation, causing energy consumption to quadruple by 2020,” he explained.
Locals have been building crypto mining farms at their homes and dachas in large numbers. Resulting in increased energy usage and frequent power disruptions, according to Vechkanov.
Some Irkutsk locals have even set up mining farms in dog shelters
The increase in power demand was also linked by Oleg Prichko, head of Baikal Energy Company, to the growing popularity of local mining operations. During the first two weeks of January, he alleged, up to seven Boeing 737 aircraft “completely filled with mining gadgets from China” arrived in Irkutsk.
Andrey Zhbanov, the head of the Criminal Investigation Department of the Ministry of Internal Affairs’ Main Directorate, claims that some Irkutsk locals have even set up mining farms in dog shelters. “Laugh all you want, but the dogs are getting hot”. He pointed out that mining generates a lot of heat, which has two advantages.
The current estimate comes months after Irkutsk officials initially reported a substantial increase in energy use in October 2021. Blaming it on the massive expansion of mining operations resulting from the outflow of Chinese miners. In late 2021, the Russian Energy Ministry said it was working on a new framework. In order to distinguish prices for general use and crypto mining.
The corporation expects compensation
Irkutskenergosbyt, a major local power distributor, said to have launched 137 cases against clients. Who allegedly used discounted electricity to mint digital currencies in basement and garage mining facilities. According to reports, the corporation expects to receive compensation for damages worth 63 million Russian rubles ($820,000).
The report comes after Russian President Vladimir Putin claimed that his country’s excess of electricity gives it a “competitive advantage” in crypto mining. The Russian State Duma established a working group in November 2021 to develop rules tailored to the crypto mining industry.