Russian Ministry wants to legalize Bitcoin mining in specific areas

[_act_]

This is about Russian ministry to legalize Bitcoin mining in some specific areas in Russia.

Russian Ministry wants to legalize Bitcoin mining in specific areas

As part of the proposal, the ministry suggested introducing lower fees for setting up mining farms and data centers in specific Russian regions as well as offering reduced energy rates for such facilities.

The ministry also wants to establish a power use limit for mining by individuals, reportedly proposing to introduce higher energy rates for increased energy spending. The authority is yet to determine a threshold amount for this, the report notes.

According to the ministry, the newly proposed rules would remove the risks of insufficient power supply for housing, social facilities and infrastructure in other regions of the country.]As part of the proposal, the ministry suggested introducing lower fees for setting up mining farms and data centers in specific Russian regions as well as offering reduced energy rates for such facilities.

The ministry also wants to establish a power use limit for mining by individuals, reportedly proposing to introduce higher energy rates for increased energy spending. The authority is yet to determine a threshold amount for this, the report notes.

According to the ministry, the newly proposed rules would remove the risks of insufficient power supply for housing, social facilities and infrastructure in other regions of the country.

With this I think even electricity from other businesses including households can be segregated from the energy bitcoin miners are using. This is not what I am concerned about, what I am concerned about is this:

The proposal aims to recognize crypto mining as a commercial activity and introduce taxes on its realized profits.

Normally, Bitcoin mining is censorship resistant, I do not know how this will be taxed in a way the government of Russia will not make Bitcoin to becoming a centralized asset like making miners addresses compulsorily mandatory for submission for the government to track in a way the government can be able to tax Bitcoin miners in Russia. Or how is this done in countries like US, is Bitcoin mining taxed?

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[Wind_FURY]

If Russia starts mining Bitcoin, China will start mining Bitcoin again too, or did China truly “ban mining” within their country? The West have given warnings that they will ban Russia from using SWIFT, what does everyone believe Russia will do? They have made the narrative more obvious for a need of an open, permissionless, censorship-resistant, ledger/protocol for money.

[btc_angela]

And as far as 2018, Russia or at least some part of it are into mining already isn't it?

There are even news that they have put up or some entity has some mining facility established already. That's why I was surprised about the news recently saying that Russia will ban everything related to crypto. If so, if crypto mining an exception?

Or this news proved again not to trust Russia because they totally contradicts themselves and take everything with a grain of salt?

[Lucius]

Normally, Bitcoin mining is censorship resistant, I do not know how this will be taxed in a way the government of Russia will not make Bitcoin to becoming a centralized asset like making miners addresses compulsorily mandatory for submission for the government to track in a way the government can be able to tax Bitcoin miners in Russia. Or how is this done in countries like US, is Bitcoin mining taxed?

I don't see anything controversial in keeping everything in line with the law - someone sets up a crypto mining farm, negotiates the price of electricity and eventually pays taxes on what he earns. Anyone can try to mine to a minimum, to stay under the radar - but all the big mining farms anywhere in the world pay taxes, one way or another. When it comes to the US - everything is pretty clear -> IRS Guidance On Cryptocurrency Mining Taxes

If Russia starts mining Bitcoin, China will start mining Bitcoin again too, or did China truly “ban mining” within their country? The West have given warnings that they will ban Russia from using SWIFT, what does everyone believe Russia will do? They have made the narrative more obvious for a need of an open, permissionless, censorship-resistant, ledger/protocol for money.

Well, Russia has never banned crypto mining, only the focus of the miners has been on China, logically because of cheap energy, labor, and the availability of mining devices. I see that you still have a theory that China has no choice but to have to allow crypto mining again just because the Russians or the US will do it - but they do it all the time. China and Russia are among the last countries in the world to accept Bitcoin the way you imagine it, China has said a clear NO, Russia is closer to that attitude than to something positive.

[YOSHIE]

This is about Russian ministry to legalize Bitcoin mining in some specific areas in Russia.

How are the miners that have been going on in Russia so far, they seem to be fine, long before this news was published, where has the ministry been, did he forget to legalize the existing miners.

As far as I know in Moscow, if I'm not mistaken it is close to the Angara River, approximately 4,000 kilometers if we depart from Russia, There, there are companies, operating on data and mining, for Bitcoin.

If the ministry makes laws against Bitcoin miners and taxes for legal miners, I think they can do it, reasoning: electricity, internet the tools russian miners need have it all or some other reason russia is a cool country to cool off the heat, I think that what the Russian ministry wants to do is proper and professional steps for mining.

[fzkto]

If I understand correctly, mining is not currently banned in Russia, so it is not clear what exactly they want to legalise? It seems that the government wants to make private small farms stay in the shadows, it will be beneficial for the big miners, which are likely to be owned by those close to the government.

[Flexystar]

I don’t think we need to be concerned about mining being commercialised. I intact see it as way of accepting the crypto currencies and thus Russia motivating others for the same. If china follow them as friendly nation then rival nations would go for full fledged mining just because to stay in the competition.

These things happen when it’s all about commercial competition too. With the crypto gaining huge attention all the countries have no options but to accept it and inject the same into official system.

[Artemis3]

It seems that the government wants to make private small farms stay in the shadows, it will be beneficial for the big miners, which are likely to be owned by those close to the government.

Exactly like Venezuela. They imposed rules which were made to ilegalize small miners, of course there is a group of large companies getting all the benefits, no doubt close to the gov. Those two govs are close "friends" after all...

[fiulpro]

I do think that Russia is currently looking for ways to increase their economic inflow right now. They want to do everything that there is to make sure they have a strong political presence in the area. I do think that government will try and put the controlled farms in such a way that they would have complete control and administration over the areas, giving the most profits to the government in return.
This controlled mining farms can be taken as a unique business proposition for most people and many countries instead of making things illegal can actually take this approach as well.
Good step for the future of Bitcoin mining for sure.

[franky1]

the average US person wastes 1.18kw/h per person (average 2.53 people per house = 2.99KW/house)
the average RU person wastes 0.91kw/h per person (average 3.2 people per house = 2.91KW/house)
the average CN person wastes 0.61kw/h per person (average 3.02 people per house = 1.84KW/house)
(yep russia is 58% worse than chinas house usage. but is 22% better than US per person)

imagining russian KWH price was say
$0.06 residential
$0.05 industrial(farm/factory)
$0.09 business(office/retail)

i would presume a regiment like this for homes:
residential: first 2KW perH=$0.04, next 3KW per H=$0.06 anything more per hour=$0.09
this way bills are cheaper if they stay below 3kw per h. the same as now if peaking over this (when heating/lights needed seasonally)
and excessive if used excessively

normal usage 2.9KW/h = 69.84kw/d
EG
= 69.84kw/d @ 0.06 = $4.19 (old standard price)
EG (my idea of rates)
= totals daily  48kwh @ 0.04 =$1.92 21.84kwh @ 0.06 =$1.31
= $3.23 (my idea price)
idea being if people can get household below 2kwh to be like china. they can pay $1.92 for 48kw/d (2kw/h)

EG normal usage 2.91HW+ an asic(3.25kw)
= 6.16kw/h = 147.84kw/d
= daily cost 48kw @ $0.04, 72kw @ $0.06, 27.84kw @ $0.09,
= total             $1.92    +        $4.32       +            $2.51
=$8.75 ($5.52 to run one asic for a day)

EG normal usage 2.91HW+ an 3 asics (6.5kw)
= 9.41kw/h = 225.84kw/d
= daily cost 48kw @ $0.04, 72kw @ $0.06, 105.84kw @ $0.09,
= total             $1.92       +      $4.32       +        $9.53
=$15.77 ($12.54 to run two asics for a day($6.27 each asic))

thus making it more expensive to run more then 1 asic from home
..
i would presume a regiment like this for industry:
industrial: KWH in renewable region=$0.033, KWH in fossil region =$0.05
this way bills are cheaper if the run industry in certain areas, without negatively impacting those already settled
where by those settled in fossil fuel can push their energy company to upgrade to renewable to offer discount to customers

[avikz]

It's good that Russia is recognizing bitcoin and its associated activities. Recently they have legalized bitcoin as a currency and now this incentive to allow mining at a cheaper cost. Overall this is positive for a strict communist government.

Usually Russian government doesn't have a lot of incomes except weapons sale. So if they are trying to open up in crypto world and create opportunities for them, that's definitely positive! But in Russia, don't trust a thing without seeing it in reality!

[Fortify]

This is about Russian ministry to legalize Bitcoin mining in some specific areas in Russia.

Russian Ministry wants to legalize Bitcoin mining in specific areas

With this I think even electricity from other businesses including households can be segregated from the energy bitcoin miners are using. This is not what I am concerned about, what I am concerned about is this:

The proposal aims to recognize crypto mining as a commercial activity and introduce taxes on its realized profits.

Normally, Bitcoin mining is censorship resistant, I do not know how this will be taxed in a way the government of Russia will not make Bitcoin to becoming a centralized asset like making miners addresses compulsorily mandatory for submission for the government to track in a way the government can be able to tax Bitcoin miners in Russia. Or how is this done in countries like US, is Bitcoin mining taxed?

The Russian economy is in tatters at present and they have few outlets besides selling resources. Through corruption and crime their businesses are crippled, because nobody can succeed to a large scale independent of government, they either get bullied to relinquish control or worm their way into the existing establishment spiderweb to survive - always having to watch out they don't get undermined. It is a highly inefficient setup and there are currently sanctions layered on top of it. The Russian people themselves are just as competent as any other country and could flourish, but they are stunted by the crony government system they fall under. The Russian government is basically seeing mining as a money making investment, they can convert their energy resources into hard cash instead of selling it as a raw commodity. All these areas will be strictly controlled with the majority of revenues going to the government now they see a money making opportunity in it.

[SFR10]

The ministry also wants to establish a power use limit for mining by individuals, reportedly proposing to introduce higher energy rates for increased energy spending. The authority is yet to determine a threshold amount for this, the report notes.

This is exactly one of the main reasons why I stopped my mining operations as a "small-scale" home miner in the past and the same thing would probably happen to a lot of individual miners in there!

According to the ministry, the newly proposed rules would remove the risks of insufficient power supply for housing, social facilities and infrastructure in other regions of the country.

This may sound like I'm contradicting myself, but if a significant amount of individual miners, for some reason decide to continue their home operations ^{[even with the increased rates]}, then they'd probably have a hard time achieving the above line.

[_act_]

If Russia starts mining Bitcoin, China will start mining Bitcoin again too, or did China truly “ban mining” within their country?

I am not thinking China will think of mining Bitcoin, total ban was place on cryptocurrencies in China, China like to just be totally centralized. It is obvious China knows the benefits of Bitcoin mining but just that it does not want anything decentralized.

If I understand correctly, mining is not currently banned in Russia, so it is not clear what exactly they want to legalise? It seems that the government wants to make private small farms stay in the shadows, it will be beneficial for the big miners, which are likely to be owned by those close to the government.

The central bank of Russia were making moves to make sure cryptocurrencies are banned in Russia until the president Vladimir Putin talks good about it and not long the bank of Russia is working to accept bitcoin as a currency. If the bank of Russia was successful, cryptocurrencies would have been banned in the country.

[DeathAngel]

Russia being bullish about bitcoin is very good for. They have vast energy resources so mining on huge scales is no problem. I guess the only negative is if the US does the opposite because of bad relations with Russia & comes down hard. That would really not be good.

[dkbit98]

This is about Russian ministry to legalize Bitcoin mining in some specific areas in Russia.is this:

Latest news I heard today is that no deal was reached between Russian central bank and their ministry, and everything has been postponed until February 18th.
This is some chess game everyone is playing and they are probably testing the grounds how other countries will react to this.
It's much harder for Russia to control mining than it is for China and other countries, but they can certainly impose more taxes and regulations.

If Russia starts mining Bitcoin, China will start mining Bitcoin again too, or did China truly “ban mining” within their country? The West have given warnings that they will ban Russia from using SWIFT, what does everyone believe Russia will do? They have made the narrative more obvious for a need of an open, permissionless, censorship-resistant, ledger/protocol for money.

Russia never stopped mining Bitcoin so there is nothing to restart, mining is legal there, and I don't believe China will start again officially no matter what Russia or any other country is doing.
I think we are going to see more countries pushing for CBDC centralized coins and China will be followed by EU who is preparing their new digital currency for 2023, according to latest reports I saw yesterday.

[Wind_FURY]

If Russia starts mining Bitcoin, China will start mining Bitcoin again too, or did China truly “ban mining” within their country? The West have given warnings that they will ban Russia from using SWIFT, what does everyone believe Russia will do? They have made the narrative more obvious for a need of an open, permissionless, censorship-resistant, ledger/protocol for money.

Well, Russia has never banned crypto mining, only the focus of the miners has been on China, logically because of cheap energy, labor, and the availability of mining devices. I see that you still have a theory that China has no choice but to have to allow crypto mining again just because the Russians or the US will do it - but they do it all the time. China and Russia are among the last countries in the world to accept Bitcoin the way you imagine it, China has said a clear NO, Russia is closer to that attitude than to something positive.

I’m not pointing out about “bans, and regulations”. I’m talking about absolute acceptance, publicly or secretly, and an actual nation-state mining Bitcoin for the benefit of themselves, directly or indirectly. Because I believe Bitcoin’s true nature in international politics/geo-politics has not been truly discovered yet, nor has that been priced in.

[n0ne]

Russia being the fourth largest generator as well as consumer of electricity makes cryptocurrency mining possible. 46% of the electricity production is out of coal. There is not much of alternate source of energy production. Maybe something like solar energy generation could boost the mining, because depending on the climatic situation Russia used to be energy dependent. If it can create alternative, this will help Russia to be self sufficient in energy generation.

Bitcoin mining can turn to be a big industry, because of the cheap electricity and the favourable climatic conditions. Russia focusing on legalizing bitcoin mining also makes other neighbouring countries to take similar decision on bitcoin mining.

[_act_]

Latest news I heard today is that no deal was reached between Russian central bank and their ministry, and everything has been postponed until February 18th.

This is confusing, I do not mean what you posted, but what central bank of Russia is doing, this is about mining, how should a central bank be concerned about Bitcoin mining in a country, this is not the work of central bank. What central bank should be concerned about is the monetary aspect of Bitcoin like how they can help people to keep Bitcoin safely in a custodial way and what they can do to make sure Bitcoin is not used for illicit activities in their country.

I think we are going to see more countries pushing for CBDC centralized coins and China will be followed by EU who is preparing their new digital currency for 2023, according to latest reports I saw yesterday.

More countries are pushing for CBDCs but what I have noticed is that CBDCs are just like fiat and have nothing to do with cryptocurrencies, CBDCs devalues and backed by fiat, and have the characteristics that can make people call it fiat. This is just a means many countries may be confusing their citizens to take CBDCs for cryptocurrencies and which is not.

[franky1]

I’m not pointing out about “bans, and regulations”. I’m talking about absolute acceptance, publicly or secretly, and an actual nation-state mining Bitcoin for the benefit of themselves, directly or indirectly. Because I believe Bitcoin’s true nature in international politics/geo-politics has not been truly discovered yet, nor has that been priced in.

there is a difference between "priced in" and "bottomline value support" increases
price is more subjective to speculative drama of emotion and temporary decisions and media hype of temporary price events.
what goes up can go down (pump and dump, hype and dip, spike and correct)
where as added value to bottomline support is more underneath the market price number. moving up at a progressive long term growth

prices can spike and correct depending on the mood and sentiment of speculators deciding which piece of news is important trade decision factor that day, and its temporary.
however the bottomline value support is based on the basic most efficient mining costs around the world absolutely no one would want to sell below because they cant even mine it any cheaper. so would rather buy coin that cheap and support the price from going below that line.

now take:el salvador
it  has a total combined electric capacity of 2gw.
and has a geothermal power plant that has a capacity of 100mw(0.1GW) that is dedicating 1.5 mw (1500kw) to bitcoin mining
this is allowing for only ~450 asics, (0.075% country cap. 1.5% power plant cap)

so small things like elsalvator going full-on in bitcoin doesnt result in much actual 'value support' of massive hashrate difference (0.049exa)
after all its not even 1% hahsrate affect, nor 0.1%, but more like a 0.026% effect
(at current bottom line value of ~$37k, it translates to about $9.62 value support added. so not even noticeable difference.)
yes the media hype might have caused some price speculation last year when it was first announced. but it didnt even move the needle of a increased value support, to support the temporary price drama media hype, thus the price corrected after the hype

but somewhere like russia which has a capacity of 220GW for all uses..52GW renewable
if russia dedicates 1.5% of all its renewable capacity to bitcoin mining(0.78gw) that would add 27.3exahash to the mining competition. which is a 14% bump at current mining competition
(note: im using a high estimate of dedication of 1.5% of all renewable russian power plants)
(note: there's no announcement of an actual figure for dedicating to mining.. so expect 14% to be optimistic top)
(note: no mining farm set up yet. so expect 14% be alot less by the time things happen)

at the moment with a baseline mining cost (bottomline value support) of ~$37k right now, that can turn into $42k bottom line support
(see notes above for emphasis)
yes it can cause more temporary speculative price drama of volatile spikes and dips. but the effect, if russia was to follow a 1.5% renewable dedication, is only at most, 14%max.. which would be less of a bottomline support % as time moves on

so dont expect a massive "priced in" effect of actual value support, but do expect some media hype causing temporary spike price drama

in short. if news hype does cause a 200% price speculation spike(new ATH). dont expect the actual value support of actual mining cost increases to equally reflect to support the 200%.

thus dont expect russia to "price-in" to any new huge sustained support value