A Russian provincial governor has proposed that the mounting worries about Bitcoin mining might be resolved by using associated gas, a byproduct of oil extraction.
Instead of being wasted or flared at oil drilling sites, associated gas might be used to power cryptocurrency mining operations, making it a more ecologically friendly and efficient energy source, per local media reports.
This suggestion coincides with Russia’s escalating bitcoin mining rules. This month, the Irkutsk region, a significant center for Bitcoin mining, declared the first-ever year-round prohibition on cryptocurrency mining in its southern regions.
Russia’s New Suggestion Comes Amid Concerns Over Environmental Concerns
The main causes of the shift, according to authorities, were environmental concerns and energy hardship.
In addition, Moscow has already banned cryptocurrency mining during the winter in ten Russian districts and territories under Russian control; the prohibition is expected to remain in effect until 2031.
The energy demands of mining operations, particularly during severe winters when electricity is desperately needed elsewhere, are causing significant national concerns, which are reflected in these policies.
Officials anticipate that using related gas will lessen the strain on local power systems and lessen the environmental damage that regular flaring causes. If successful, this strategy might make it possible for Bitcoin mining to continue in Russia within a more regulated and sustainable environment.
Russian Oil Giants Partner With Crypto Mining Firms
Russian oil corporations have been working with cryptocurrency miners since the early 2020s to create prototype projects that use related gas to power mining operations.
An abundant and inexpensive energy source for Bitcoin mining might be associated gas, a byproduct of oil extraction that is frequently flared off as trash.
Major entities like BitRiver, one of Russia’s biggest Bitcoin mining companies, and Gazprom Neft, a significant state-backed oil producer, started collaborating in 2022 after seeing this potential.
In order to boost Russia’s expanding cryptocurrency mining sector and lessen waste and environmental damage, their partnership focuses on using related gas to power mining farms located directly near oil fields.
These programs seek to provide oil firms with a new source of income while addressing issues related to energy sustainability.
Why is it Strict on Crypto Miners?
Russia has approached cryptocurrency mining strategically and cautiously, striking a balance between stringent regional regulations and legalization.
President Vladimir Putin signed legislation allowing cryptocurrency mining in August 2024, which stipulates that miners must register with the Ministry of Digital Development and adhere to energy consumption caps.
Although this action incorporates mining into Russia’s official economy, stringent regulations have been implemented in a number of areas due to worries about energy pressure.
To safeguard local power grids during periods of high demand, ten regions—including Dagestan, Ingushetia, and portions of Siberia—were placed under a six-year mining embargo that would end in 2031.
A year-round prohibition on cryptocurrency mining was also implemented in the southern regions of Irkutsk, a significant mining hub. Russia’s efforts to promote controlled mining while preserving its energy infrastructure are reflected in these measures.
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