[2017-09-25] Mining ”More Profitable Than Drugs and Arms Trafficking” in Russia

[moriskarlov]

Russian media has conducted interviews with several representatives of the country’s bitcoin mining industry. The investigation has provided unique insights into an expansive industry that penetrates all levels of Russian society, ranging “from schoolchildren to pensioners”.

Dramatic GPU Shortages Earlier This Year Signify a Sharp Increase in Russian Crypto Mining Activities During 2017

2017’s cryptocurrency boom sparked widespread graphics card shortages globally, with the most extreme shortages being witnessed in low-wage nations such as Russia – where cryptocurrency mining can offer returns that rival many mainstream careers. Following a dramatic increase in mining activities from both the public and private sector, RT, an international news organization funded by the Russian state, has conducted interviews with several miners, seeking to gain insights into Russia’s bitcoin and cryptocurrency mining industry.

RT spoke with a Siberian miner, Ilya, who describes a rising popularity of bitcoin mining that penetrates all demographics in Russian society. Ilya states that “pensioners come to their grandchildren, and give them gadgets for mining as presents. They hold competitions among their grandchildren who will earn most bitcoins! Essentially, pensioners get their grandkids hooked on mining!”

Cryptocurrency Is Turning Russian Teenagers Into Businessmen

RT met with Dmitry, a 15-year-old schoolboy who has started to mine for bitcoin. Dimitry states that “mining technologies are very promising. An increasing number of people get involved in this, get new skills and improving old practices.” Despite growth in the sector, the student concedes that he has encountered skepticism regarding his activities, including from his parents. “Although I have vividly described to them the mining process and the opportunities of mining, they feel suspicious about it. That’s why I have to do this alone.”

Speaking at the recent “Digital Economy: Generation Z” quiz in Moscow, 16-year-old Yaroslav claimed to have made paper gains of over 12,000% this year through cryptocurrency investments. Yaraslov stated that he “invested 1,000 rubles ($17 USD) in February. Seven months have passed, and now I have 127,000 ($2,200 USD) in cryptocurrency equivalent.”

The Average Monthly Russian Wage Is Approximately 3,800 Rubles ($66.05 USD)

Many Russians have turned to bitcoin mining as a response to prevailing economic hardship. One Siberian miner, Domashko, began mining in order to attain subsistence, stating that “the terrible crisis did not let me live”, and that “even drug and arms trafficking don’t [yeild the] profitability” of mining. Domashko believes that bitcoin is set to achieve widespread mainstream adoption, stating that “[bitcoin] will take the place comparable to the mass capitalization of the dollar and the euro… If it wasn’t worth it, [Russian President] Vladimir Putin wouldn’t talk about it, laws wouldn’t be adopted at the state level by such countries as Japan and Russia.”

Russia’s finance ministry recently announced that it is currently working on a draft bill for the legalization and regulation of cryptocurrencies. Finance minister Anton Siluano stated that “there is no point in prohibiting [cryptocurrencies], it is necessary to regulate them”, confirming that Russia will not seek to prohibit cryptocurrencies. Russia has also recently advanced its plans to foster a globally dominant mining sector, inviting bitcoin miners to create an industrial park for cryptocurrency mining in the Leningrad region. The announcement comes just weeks after The Institute for Internet Development and the Russian Association of Blockchain and Cryptocurrency unveiled plans for the development of a project designed to subsidize the electricity for large-scale cryptocurrency miners.

https://news.bitcoin.com/crypto-mining-more-profitable-than-drugs-and-arms-trafficking-in-russia/

[Karartma1]

I did not know the average monthly Russian wage was still so low (approximately 3,800 Rubles = $66 USD)! I supposed nothing really changed in terms of wealth after the end of the Soviet Union (the usual game "the rich get richer and the poor, well, you know that). I wonder if Putin is really Crypto-friendly as it looks like from his recent talks with Vitalik.
The should create a crypto innovation lab down there to gather startups and crypto-powered businesses.

Time stopped there

[michkima]

Well seems like bitcoins would likely be a big industry in Russia now. Before even all of this positive news from Russia's government, the country has been one of the hotspots for bitcoins and other cryptocurrencies. Altcoins like Ethereum came from a Russian. Now if they are positively enforcing laws then it could be the haven for all crypto.

[aso118]

Eventually, as more and more people discover mining, the profitability will drop. GpUs, which are already in short supply, will become scarce. Electricity prices will go up. Then all these stories will die down.

[veleten]

'"The Average Monthly Russian Wage Is Approximately 3,800 Rubles ($66.05 USD)"=you can see the quality of the author

seriously.... 66$ monthly wages in Russia? have you even tried to do some research or taken the figure out of the thin air?
teenagers into businessmen,a dude invested 17$ and now has 2k USD,WOW we have a businessman here
a shallow,ascewed view,where the author doesn't bother to research the topic,just posts a collection of catchy media coverage opportunities

[iamTom123]

"RT met with Dmitry, a 15-year-old schoolboy who has started to mine for bitcoin. Dimitry states that “mining technologies are very promising. An increasing number of people get involved in this, get new skills and improving old practices.” Despite growth in the sector, the student concedes that he has encountered skepticism regarding his activities, including from his parents. “Although I have vividly described to them the mining process and the opportunities of mining, they feel suspicious about it. That’s why I have to do this alone.”

This is an inspiring story and if can be seen by as many Russians as possible can possibly start a good revolution in there. I understand that there is really a growing interest within the Russian society to go into cryptocurrency right now and they can be taking advantage of what China is trying to kick out of their country.

We are just hoping that eventually the government would put up the necessary regulatory framework for Bitcoin and the whole cryptocurrency so many people can get in into the Bitcoin bandwagon and enjoy the privileges they might be looking for. This is a good opportunity for Russia to be a good hub for the new revolutionary platform.

[Irvinn]

I would like for such a large country as Russia to finally recognize the crypto currency as a legal tender on its territory. Until now, there is conflicting information about the recognition of the crypto currency in this country. And as for the production of bitcoins, it really is, since in different countries they began to work hard on this, and only 25 bitcoins can be extracted 10 minutes in a shorter period, the profitability of this type of business should fall sharply.

[richardsNY]

Eventually, as more and more people discover mining, the profitability will drop. GpUs, which are already in short supply, will become scarce. Electricity prices will go up. Then all these stories will die down.

It all depends on how this market keeps evolving. If the price continues to increase alongside the increasing difficulty, the possible negative aspect of an increasing difficulty will be compensated. I personally don't understand why people keep investing capital into dedicated mining equipment and GPU's, while they can choose to buy themselves into whatever crypto currency, and directly benefit from the returns that this booming market generates. It saves you a lot of time and hassle, plus your returns are far higher.

[Iranus]

Eventually, as more and more people discover mining, the profitability will drop. GpUs, which are already in short supply, will become scarce. Electricity prices will go up. Then all these stories will die down.

It all depends on how this market keeps evolving. If the price continues to increase alongside the increasing difficulty, the possible negative aspect of an increasing difficulty will be compensated.

It goes without saying that if the price rises exponentially forever, these amateur investors and amateur miners won't get a slap in the face.  But it doesn't seem too likely, does it?

I personally don't understand why people keep investing capital into dedicated mining equipment and GPU's, while they can choose to buy themselves into whatever crypto currency

It's an extremely simple concept to understand.  Over time it self-regulates itself so that it's profitable for the people who mine most efficiently and with the lowest electricity costs earn a significant profit.

It's only strange when people put too much effort into trying to mine when they're not in good circumstances to do so.