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Russia is all set to build crypto mining city in Siberia

Russia may soon build a city in Siberia with mining resources to help people earn income via mining.

The Bitcoin City will be in Siberia or the Far East and not far from a large hydroelectric power station in the area. The business hub could, in future, become a tourist attraction. And attract oversees investors, according to a Russian State Duma member Boris Chernyshov.   

“A mining city will help people make money, buy apartments and other things they need. It will replenish the state budget at the expense of taxes.”

Cryptocurrency reach in Siberia

Cryptocurrency mining is already popular in Siberia because of low energy costs. Proof of Work mining requires high computing power and lots of electricity. In Irkutsk, electricity is five times less expensive than in Moscow. The city is a hub for cryptocurrency mining.

The idea of the city was supported by Russian Internet Ombudsman Dmitry Marinichev who, however, said the project would fail if owned by the state.

“I am for any initiative that leads to the creation of jobs, added value. The opportunity to produce new technological products or services. I am against the state being the owner of the business. The state has nothing to do with business, the state must formulate the rules of the game. Any business should have a beneficiary, one who is vitally interested in the enterprise.”

In Russia, mining can bring some $300 to $400 additional monthly income to households, while the required equipment pays off in less than 6 months according to one case of a Russian miner highlighted by Bloomberg earlier this month.

Vladimir Gutenev, first deputy chairman of the State Duma’s committee for the economic policy backs blockchain as “a very interesting technology that should be used, among others, to get back the Russian money that was earlier taken abroad.”

Bitcoin City is unfeasible

However, he said that this idea of a Bitcoin City is unfeasible, conveys big risks and is a populist move that would bring no preferences either to the city or its citizens.

“I don’t simply back up the idea of my colleague. I think it conveys a certain portion of risks. And I could assume that this initiative takes roots in general relevance of the topics of cryptocurrencies and digitalization,”. He said.  

Russia does not have legislation governing cryptocurrencies but  President Vladimir Putin has already ordered that there be legislation governing status of bitcoin, other cryptocurrencies, mining, initial coin offerings and the defining of digital money.

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David

David Kariuki is a journalist who has a wide range of experience reporting about modern technology solutions including cryptocurrencies. A graduate of Kenya's Moi University, he also writes for Hypergrid Business, Cryptomorrow, and Cleanleap, and has previously worked for Resources Quarterly and Construction Review magazines.

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