Russian Bitcoin mining company plans to take 20% of BTC hash rate

  • The Russian Mining Company (RMC) plans to install a Bitcoin mining farm on the site of an old aluminium plant.
  • The new mining facility is intended to provide up to 20 percent of the world’s total Bitcoin hash rate.

The worldwide Bitcoin mining competition is in full swing. The Russian news portal RBC reports that the Russian Mining Company (RMC) is planning to install a Bitcoin mining farm on the site of a former aluminum plant, which is intended to provide up to 20 percent of the total worldwide Bitcoin hash rate.

The former aluminium plant in the Karelia region once belonged to the Russian metal giant Rusal. However, Rusal shut down production in the summer of 2018 after losing access to the American market due to US sanctions. Some of the old halls have now been rented by the Russian Mining Company (RMC). Dmitry Marinichev, Russian entrepreneur and founder of RMC, explained (freely translated):

Now the plant in Rusal is unprofitable, the electricity supplied is practically unused, and the people in the industrial city near the plant have no jobs. Our idea is to redesign the plant and sell its computing power as a service, i.e. offer an IT service.

Marinichev conducted an Initial Coin Offering (ICO) for RBC in 2017, which raised $43 million. This was significantly less than the $100 million the company intended to raise. However, it was still the most successful ICO in Russian history. In the same year, RMC created two mining pools for Bitcoin (BitcoinRussia) and Ether on the site of a former Moscow automotive plant.

Furthermore RMC announced a partnership with the British Cryptonex exchange on 24 October. Through this partnership, Marinichev aims to expand RMC to 20 percent of Bitcoin mining worldwide. This would generate revenues of approximately USD 100 million per month. So far, it is still a long way for RMC from achieving a market share of 20 percent. The data from btc.com show that BitcoinRussia currently still accounts for a (presumably) small volume of the Bitcoin hash rate, as the pool is not listed and only 7.9 percent comes from “unknown” miners.

Global Bitcoin mining race

Yuri Pripachkin, President of the Russian Association for Cryptoeconomics and Blockchain (RACIB), believes that mining is still lucrative, but he cautions that electricity costs are the decisive factor (freely translated):

Electricity prices in Moscow are quite high, and it is only for this reason that the placement of mining equipment elsewhere can prove more profitable.

At the same time, he doubts that RMC can get 20 percent of Bitcoin mining (freely translated):

There are already many players in the world who use this cryptocurrency. For the Russian pool, it is realistic to concentrate on 5-7% of the total volume, and the indicator depends very much on access to the corresponding electricity prices.

The concerns are also related to the news of recent days. Bitmain has announced that it will open the world’s largest Bitcoin mining farm in Texas (USA), which will initially be expanded to 25 megawatts and later to 50 megawatts, as well as 300 megawatts in the long term. In addition, the Chinese province of Sichuan has announced that it will intensify its efforts to remain the market leader, CNF reported. Sichuan is currently still the leader in the Bitcoin mining industry due to its low-cost hydropower.

In addition, Bitmain’s largest competitor, Canaan Creative, applied a few days ago for a US$400 million IPO in the US. With the new funds, Canaan Creative could prepare for a further expansion of its mining activities.

About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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