Russia will benefit Bitcoin miners with discounts on electric service

A pilot project to subsidize electricity costs to Bitcoin and other cryptocurrency miners is currently under development in Russia, local media reported. Meanwhile, the authorities' interest in Bitcoin, Ether and mining has grown significantly this year.

Project to benefit Bitcoin miners

The Institute for Internet Development (IRI) and the Russian Association of the Block and Cryptocurrency Chain (RABIK) are working on a pilot project to subsidize electricity costs related to mining activities of cryptocurrencies.

Arseny Shcheltsin, IRI project manager, told Izvestiya newspaper that the owners of the mining centers will receive discounts on electricity, but did not disclose details about the geographical location of the project. Both organizations revealed, according to the publication:

In addition to the legalization of cryptocurrencies in Russia, it is necessary to create the most favorable conditions for the work of the miners.

According to the RNS news service, while IRI seeks to develop technological operations in Russia, RABIK is an organization that focuses on the union of the Blockchain community and the owners of cryptocurrencies, including miners and investors of the Initial Currency Offers. (ICOs). RABIK was created at the end of August by Herman Klimenko, Internet adviser to President Putin.

Subsidy to electric service costs

Izvestiya suggests that professional cryptocurrency mining demands cooling solutions that require a lot of electricity, also claiming that Russia's largest cryptocurrency mining center consumes a total of 3,240 megawatts. The cost of 1 kilowatt, depending on the region, is from 2 to 5.3 rubles (From US $ 0.03 to US $ 0.09).

At the beginning of 2017, Russia's largest crypto-mining center invested at least 6.4 million rubles (US $ 111.7 thousand) in energy, representing the lowest electricity tariff per month. However, the mining farm compensates its costs with profits, obtaining at least 20 bitcoins per day. 1 bitcoin in Russia equals 270 thousand rubles (US $ 4,714.20). This means that this mining center obtains at least 600 bitcoins per month in profits.

Special economic zones

Shcheltsin believes that it is possible to grant discounts to Bitcoin miners using a special order of regulation for Special Economic Zones (ZEE). These zones are established by the Russian government to attract direct investments and the privileges of the associations last for 49 years.

One of the regions that has sought to attract cryptocurrency miners is Kaliningrad. Last week, the director of the Kaliningrad Regional Development Corporation, Vladimir Zarudny, explained how this special economic zone is ideal for mining activities in the country.