Of all the situations where you might think “don’t try this at home” is a sensible piece of advice, a warning not to mine Bitcoin at residential addresses isn’t one of them. When you add the fact that this is happening in Russia – the fourth largest generator of electricity in the world – it’s baffling.
However, Russia is currently weighing up whether a ban is needed on private home mining. Surprisingly, this comes just days after the announcement that the Russian government was fully intending to help Bitcoin and other cryptocurrency miners with their electricity costs.
So what does this say about other recent statements, claiming that cryptocurrencies are something that ordinary people should avoid at all costs, and that sales to those ‘ordinary people’ will be banned? When the finance minister is describing Bitcoin and the like as a pyramid scheme, it’s difficult to decipher exactly what’s going on. It could have something to do with Russia revealing plans to create its own cryptocurrency – the so-called ‘Bitruble’ – and wanting to keep investment close to home.
But back to the at-home miner; RIA Novosti, a government organisation, reportedly wants participation in private address mining completely banned, as a ‘waste of electricity’. This seemingly contradicts the alleged 70 locations where ‘spare’ capacity is supposedly already being discussed in talks with private miners, specifically to use the cheap energy rates Russia enjoys to compete with China’s cryptocurrency mining endeavors.
So what really is the problem?
Bitcoin mining is carried out with a variety of electronic devices, and what do electronic devices generate? Heat. Domestic electricity networks, such as those in blocks of flats, are completely unable to cope with the overload to the ventilation systems, and there is a very real danger of fire.
This brings electricity safety experts and cryptocurrency supporters into serious dispute. For example, Russian Internet Ombudsman Dmitri Marinichev is of the opinion that cryptocurrency mining is the kind of thing that Russia should be encouraging; especially if they were kept well away from high population (and therefore high grid demand) areas like Moscow. For example, the current ‘Bitcoin Capital’ of Russia is in the Irkutsk region, where electricity is considerably cheaper than in Moscow, and a computer mining Bitcoin is using less energy than, say, an electric heater.
There’s no doubt that this one is set to run. The comment would even indicate that this is still an overhang of the ‘old regime’, preventing ordinary people from gaining independence by creating their own wealth. After all, common everyday electrical appliances such as cookers, washing machines, and televisions also consume electricity and presumably overload the ventilation systems in exactly the same way as a computer mining Bitcoin.
Governments are still wary of a digital currency where there is no central regulation, and it would seem that Russia is no exception to this. It will be interesting to see in the weeks and months to come whether private miners are indeed banned from home-mining.