Like Russian miners facing domestic cryptocurrency mines
November 13, 2018 by Jeff Fawkes
If a miner in Russia uses his apartment to install cryptocurrency plants, they open themselves to many weaknesses and risks. How do Russian miners tackle the problems of private mining? Let's find out.
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Mining hotels allow people to overcome the problems of mining at home by renting space for user installations. Owners must have energy sources, fire alarms, high speed internet and cooling systems.
In addition, most of Russia's mining hotels have guards, but renters generally have the right to enter buildings almost 24 hours a day.
During the first quarter of 2018, domestic demand for mining hotels registered a six-fold increase in the nation for Blockchain for lawyers, a group of Russian legal analysts. As for the prices of such rentals, they range from 2,800 to 6,500 rubles a month (from 43 USD to $ 98 USD).
Restrictions on the importation of equipment
At the beginning of 2018, Bitmain's Antminer S9 platform was priced around $ 1800 in Russia, and during the summer it fell to $ 400 per device.
However, in March 2018, the nation's federal customs service introduced new regulations on imports that made mining equipment available for additional costs.
GPUs or graphics platforms are now imported as usual if you declare them as "motherboard accessories", while specialized ASICs must have a license from the domestic Minpromtorg – Ministry of Industry and Trade of Russia.
This license in turn requires a mandate from the Federal Security Service (FSB) on the import of devices focused on cryptography. Furthermore, in order to receive their tools, the miners must submit an application to the United register of the imported encryption / decryption devices.
Legal basis and taxes
Russia has constantly worked with its cryptocurrency regulations since the beginning of 2018.
Currently, while legislators are preparing even stricter rules, national miners are already obliged to pay a 13% income tax on their crypts.
On the basis of this system, an exchange or sale of mined crypts is considered by law as an act of money creation, a dynamic that brings greater legal burdens on Russian miners.
In recent years, electrical infrastructure has been a major economic priority of the nation. Now, the country also suffers from overproduction of energy: an abundance of electricity that could be solved through the centralized bitcoin coal mines of state or a decentralized network of small mining hotels.
As for costs, Russia has a wide choice of electricity tariffs from region to region.
For example, in the warm autonomous district of Irkutskiy, you will pay one ruble per kWh. As another example, the autonomous district of Chukotsky will charge eight rubles per kWh, even if the cold climate of the region allows to renounce the costs of installation of the temperature control.
In addition, before using a mining hotel or any electricity supplier, Russians must ensure that they use legal power lines and do not exceed the permitted monthly usage limits. The suspiciously cheap or expensive costs of mining hotels should raise doubts about the legitimacy of these operations.
Taking stocks and looking forward
Since miners are increasingly being traced to Russia – both by authorities and criminal elements – many miners avoid being included in unofficial or official documents related to cryptocurrency activities.
For some, the associated and possible headaches are not worth it. For others, following the rules is quite simple if proper precautions are taken. And of course there are those Russian miners who are going to rummage discreetly, regardless of who wants to come after them.
An important thread to be observed will be the way in which the mining landscape of the nation will change in the next 10 years.
What are your solutions for Russian miners or for those who generally live in totalitarian countries? Let us know your suggestions in the comments section below.
Images by Jeff Fawkes, Wikimedia