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Mining-In-Law: USA, Canada, Iceland and... Russia!

02 August 2018 13:17, UTC
Mining-In-Law: USA, Canada, Iceland and... Russia!
By Ann Sotnikova

The number of mining companies in Russia for the first half of 2018 increased by 15% and amounted to 75 000, reports the national cryptocurrency Association. The official data says that there are more than 350 thousands of people involved in Russian mining industry. The country itself occupies 6% of the world mining market.

Such tendency doesn’t look surprising. Russia has all it needs to become the leading country in mining industry and it is a very attractive place for miners. Oddly enough, the lack of legislation has a beneficial effect on the crypto business. After all, it would impose restrictions on the activities of mining enterprises.

The leading positions in cryptocurrency rate where Russia is moving so rapidly are held by the USA, Canada and Malta. In these countries the legal field has already begun to spread its influence on miners. However, this does not always improve the conditions of crypto-miners, and sometimes vice versa.

For example, this week Franklin PUD, Washington, announced the termination of acceptance of applications for the use of electricity for mining of cryptocurrency and related blockchain transactions. The reason for this step was the rapid growth of the number of mining companies. A temporary moratorium, according to the authorities, will allow employees to explore the impact of cryptocurrency mining farms on electricity supply in the region.

The ban made Franklin the last County in the state to restrict cryptocurrency miners. Earlier, similar moratoriums were issued by Chelan and Mason counties. The place itself is considered more than attractive for mining crypts-low energy costs, coupled with a cool climate, help miners get the most from their investments.

However, in fairness it must be said that there are states friendly to miners. For example, the authorities of New York from July this year can set special tariffs for electricity for companies that produce crypts. As a result, mining companies that consume more than 300 kW of electricity, have the right to enter into a contract with the municipal services on individual conditions.

Most experts agree that one of the best countries for mining can rightly be called Canada. Until recently, the ideal place for bitcoin mining was considered the province of Quebec. Crypto-miners were attracted by cheap electricity due to the fact that Quebec is very rich in hydro resources.

As a result, a huge number of miners flocked to the region. But in mid-July, local authorities announced their intention to increase tariffs for enterprises for the production of cryptocurrency. The resolution significantly reduced the attractiveness of the area for miners.

Anyway, miners can quite comfortably mine bitcoins in other provinces of the country due to the excellent climatic conditions and very friendly attitude of the government to the industry.

There is no country to compete with Iceland. While speaking about the level of favorability for miners, it is the best. Electricity is very cheap here: on average, $ 0.043 per kWh, which makes production minimal. The cold climate (the average annual temperature in Iceland is about 7°C) also allows significant savings on cooling systems. All this makes the country literally a magnet for many energy-intensive industries, including mining. It is expected that by the end of 2018 mining enterprises will consume more electricity than the entire population of Iceland.

As for the relations with the authorities, everything is somewhat ambiguous. According to the foreign currency Act, Icelanders are forbidden to conduct cross-border transactions with bitcoins, but inside the country it is possible to own cryptocurrencies, as well as to extract them. In addition, some MPs insist on the introduction of taxes for mining companies.

So, it turns out that the best countries for the production of virtual currency — Iceland and, suddenly, Russia. In the first — cheap electricity, in the second due to the lack of legislation we get Schroedinger’s mining: it is in the law till there is no law.

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