Russians seek to break Chinese Bitcoin ‘mining centralization’
The saying that the Chinese are the leaders when it comes to Bitcoin mining could be a subject of debate henceforth if the proposed plan by a Russian company to start using semiconductor chips designed in Russia for use in satellites to minimize power consumption in computers for crypto mining sees the light of day.
Russian Miner Coin or RMC is seeking to take advantage of Russia’s 20 gigawatts of excess power capacity and low consumer electricity prices (about $0.013 cents) per kilowatt hour which is less than the price in China to beat Chinese miners to their game. The company wants to raise $100 million in an initial coin offering with a promise to give investors a right to 18% of the company’s mining revenue, according to a presentation cited by Bloomberg.
Generally, the meteoric rise in the price of Bitcoin and other cryptocurrencies in the course of this year, especially this month (August 2017) when the top digital currency touched a new all time high of over $3400, has triggered a renewed interest in crypto mining as the operation now offers far greater profits than the average rate. The new interest has contributed to the surge in the prices of graphic cards by approximately 80 percent due to their shortage in the market as a result of an increase in demand for cryptocurrency mining hardware among European, especially Russian, consumers.
RMC is reportedly co-owned by one of President Vladimir Putin’s internet advisers, Dmitry Marinichev. According to him during a press conference, $10 million from the proceeds of the ICO may be spent on developing the processors for mining operations as he estimates that Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.
In the last two years, the blockchain-based crypto market in Russia has seen a boost following developed interest among users and there has been a recent approval from the political authority. The country, as well as other Eastern European countries such as Ukraine, Latvia and Slovenia, now hold a major pillar in the crypto space that serves as a bridge between countries in the West and Asia which are known to dominate the industry. Several events and initiatives have been introduced from their end of late mostly for security-related applications and the region’s impact has taken a stand that shows it will likely widen with time going by indications.
Going by this understanding, initiatives like RMC’s are set to make cryptos, particularly Bitcoin, to enter a new phase of adaptation. It is general knowledge that there are only 21 million Bitcoin to be mined - almost 16.5 million already mined - by 2140 despite the rising difficulty level and the reducing supply due to the block reward halving every four years. These initiatives will help spread out the hashing power that seems to be concentrated in China as far as Bitcoin mining is concerned.
Also, with suggestions that Bitcoin is becoming more acceptable among some nations as a reserve currency, a spread of hashing power will prevent one nation from gaining total control over its mining.
If all pans out well for RMC, it could join the league of the world’s top leading producers of crypto mining equipment such as China’s Bitmain Technologies Ltd and Bitfury Group with operations in Georgia and Iceland.