Electricity consumption increases in Irkutsk as more Russians start mining cryptocurrencies

Electricity consumption rises in Irkutsk as more Russians start mining cryptocurrencies - maxw 960Electricity suppliers in Russia's Irkutsk region have seen a surge in energy consumption in residential areas that blame cryptocurrency mining. Aircraft with equipment for the mining from China limited they continue to land in the region, and hardware theft cases have also increased significantly.

Irkutsk struggling with rising electricity needs amid the growing popularity of mining

Companies securing electricity supplies in Russia's Irkutsk region reported a four-fold increase in consumption by the population in 2021 over the previous year, blaming amateur cryptocurrency miners for the spike. Cited by Tass, Irkutsk Electric Grid Company development director Evgeny Vechkanov cited high cryptocurrency prices and China's mining ban as the main reasons.

Oleg Prichko, CEO of the Baikal Energy Company, confirmed that the growth is largely due to "gray" mining. Commenting on its diffusion, he revealed that in the first half of January alone, seven Boeing-737s, loaded with coin-minting hardware, arrived in Irkutsk. “A lot of trucks are hauling equipment from China which is not needed there due to the ban. Virtually free equipment migrates to the Irkutsk region, ”Prichko added.

Many Irkutsk Oblast residents have set up mining farms in their homes and dachas, the report notes. The load on the power grid is growing, leading to frequent failures and blackouts. Russian authorities insist that these miners are actually engaged in commercial activities, while they continue to pay for the energy they burn at preferential and domestic rates. These are about four times lower than commercial rates, and in Irkutsk, prices start at just $ 0,01 per kilowatt hour in rural areas.

Meanwhile, the number of mining rig theft cases is also on the rise

Last year, 344 such crimes were recorded in the region. The losses amounted to 160 million rubles (over 2,1 million dollars). Law enforcement agencies have so far solved 54 cases, with 66 offenders brought to justice. Andrey Zhbanov, head of the Irkutsk regional criminal investigation department, said that in 2021, such crimes were committed almost daily.

Russia's importance as a mining hotspot has increased significantly since the Chinese government launched a nationwide crackdown on cryptocurrency mining. A study by the Cambridge Center for Alternative Finance ranked Russia third in terms of mining capacity and last August, its share in the global bitcoin hashrate surpassed 11%.

Mining is a profitable business in Russia and also a source of additional income for many ordinary Russians. Its legal status has yet to be determined and many Moscow officials have supported the idea of ​​recognizing it as a business, which would allow the government to tax it and raise electricity rates for both mining companies and individual miners. At the same time, electricity suppliers in Russia have proposed measures to limit home mining.