In Siberia, cheap hydropower, cold climate, and abandoned Soviet industrial infrastructure has made the region of Irkutsk an attractive spot for urban explorers and, more importantly, crypto miners.
In the city of Bratsk lies one of the largest hydropower plants in Russia. The massive dam and generator feeds the region’s growing mining farms. Cheap electricity is actively attracting miners from all parts of the world, turning the region into an international mining hub.
In addition to the cheap electricity, the local climate is favorable to miners: the average annual temperature in Bratsk is 28 degrees Celsius or 82.4 ℉. The warm season (meaning when it’s not freezing) lasts four or five months a year and the rest of the time it’s a deep freeze.
Another advantage is the plethora of empty buildings left by the Soviet factories that didn’t survive Russia’s turn to a market economy.
Now some of those buildings, with the electricity already plugged in, have made the leap from the industrial to post-industrial age, becoming homes for mining hardware. In these remote areas, the miners can gobble up hydropower without disturbing the neighbors.
Three companies, Bitriver, Cryptoreactor, and Minery, are the biggest players here offering “mining hotels,” or venues to place ASICs equipped the cooling systems, tech support teams and security guards.
Bitriver boasts 100 megawatt of power available for clients while Cryptoreactor said it had secured 40 megawatts and Minery claims 30 megawatt. The venues are currently hosting machines from the clients in the U.S., Russia, Japan, Korea, Brazil, Lithuania, India, Poland, Spain, China, and other countries.
At one of Minery’s two farms, for example, 26 massive shipping containers host ASICs owned by the miners from the U.S., Russia, Korea, India, Japan and Spain, the firm’s CEO Ilya Bruman said.
Dmitry Ozersky, CEO of Eletro.Farm, a mining company building a large venue in Kazakhstan, believes bitcoin mining farms across Russia now wield a joint capacity of 600 megawatts, accounting for almost 10 percent of the total 7 gigawatts of power supporting the bitcoin network worldwide.
We went on location to see the mines in action and came home with some amazing footage.
The computing power dedicated to mining bitcoin has hit yet another new high, suggesting that more than 600,000 powerful new machines may have come online in the last three months.
According to data from crypto mining pool BTC.com, bitcoin’s two-week average hash rate has crossed another major threshold, reaching 85 exahashes per second (EH/s) around 19:00 UTC last Friday. Meanwhile, mining difficulty also adjusted to a new record of nearly 12 trillion.
Notably, both figures have jumped 60 percent since June 14, the data shows.
Bitcoin’s mining difficulty – a measure of how hard it is to create a block of transactions – adjusts after 2,016 blocks, or roughly every two weeks. This is to ensure the time to produce a block remains around 10 minutes, even as the amount of hashing power, deployed by machines around the globe competing to win freshly minted bitcoins, fluctuates.
Several new models of application-specific integrated circuit (ASIC) miners hit the market over the summer, with an average hashing power around 55 tera hashes per second (TH/s).
Assuming all of the 35 EH/s of new hashing power added since mid-June came from these top-of-the-line models, a back-of-the-envelope calculation suggests that more than half a million such machines have connected to the bitcoin network. (1 EH/s =1 million TH/s)
These powerful ASIC miners, made by major manufacturers such as Bitmain, Canaan, InnoSilicon and MicroBT, are priced from $1,500 to $2,500 each. So if more than half a million of them were delivered, as estimated above, the leading miner makers could have made $1 billion in revenue over the past three months.
Bitcoin’s spiking hash rate and difficulty are in line with the soaring price since earlier this year, which led to increasing demand for mining equipment that has significantly outstripped supply. It’s also in part thanks to the rainy summer season in southwestern China which resulted in cheap, abundant hydroelectric power.
Further, there has also been a growing interest in Russia’s Eastern Siberia region, where the Brastsk hydropower station built in the Cold War era has been utilized to power mining farms that are estimated to account for almost 10 percent of the total computing power on the bitcoin network.
Miners in China estimated earlier this year that bitcoin’s average hash rate in the summer would break the level of 70 EH/s, which happened in August.
As such, major miner manufacturers have already sold out equipment that is due for shipment until the end of the year with customers placing pre-orders three months in advance.
TokenInsight, a startup that focuses on analysis of crypto trading and mining activities, said in a report published Friday that additional supplies of miners are expected to hit the market in the coming months.
“Following the drastic increase in bitcoin’s price, the bitcoin mining market saw significant inflation in Q2 2019. Most of the miners from various manufacturers were in serious shortage and pre-orders submitted in Q2 and Q3 are to be delivered by the end of the year,” the report states.
Therefore, the firm estimates mining difficulty will maintain its growth momentum to reach 15 trillion by the end of the year – with bitcoin’s average total hashing power crossing the threshold of 100 EH/s for the first time in its history.