Russia is supporting the growth of bitcoin mining in Siberia by providing subsidies to BitRiver, a bitcoin mining company. This development has the potential to change the dynamics of bitcoin mining in the region, which is rich in energy sources and raw materials. In this article, we will explore the implications of this move for the bitcoin mining industry.
Benefits for Bitcoin Mining in Siberia
Siberia is an attractive location for bitcoin mining because of the abundant energy resources in the region. BitRiver has received subsidies to operate 30,000 bitcoin mining rigs in the region. Moreover, local media reports suggest that the company will be hiring 100 people to manage the mining rigs.
The Advantages for BitRiver
BitRiver enjoys various tax exemptions, including the exemption from property tax and land tax. The most significant benefit for a bitcoin miner is the cost of electricity, and BitRiver is said to be receiving a 50% discount on the energy bill. The mining rigs will be located in Boerjatië, which is an autonomous republic in the Russian Federation. This area is a special economic zone with different rules and regulations, designed to attract foreign and domestic investors.
The Fallout from US Sanctions
BitRiver is on the United States sanctions list, which has implications for both Russian and American companies. Recently, Compass Mining, a US-based bitcoin mining company, had to forfeit their mining hardware stored at BitRiver due to the sanctions. Additionally, they had mining rigs located in Russia that were unable to be relocated due to the sanctions. BitRiver and ten of its subsidiaries were blacklisted by the US Department of the Treasury for their alleged role in supporting Russian intelligence agencies.