According to a new report, Russia is reportedly the second largest Bitcoin mining country, just behind the United States. This new report was first published by a Russian news agency called Kommersant. Apparently, Russian Bitcoin miners are increasing, and it seems they will soon take over the first position from the United States due to their current uncertainty in the sector.
The United States has been lagging in Bitcoin mining, and this could shake up the world rankings in the future. The news publication agency Kommersant noted that regulatory issues in the United States threaten miners in the country.
"Russia has risen to second place in the world in cryptocurrency mining. The United States remains the leader. However, the uncertainty in the regulation of cryptocurrencies there may trigger a new redistribution of the market," Kommersant said.
But it also noted that the United States isn't the only country in the world facing regulatory problems. Russia's Bitcoin regulation hasn't been stable, just like that of the United States. The two countries, if their regulatory issues should persist for a long time, it could lead to other countries taking over their positions. The legal framework for Russian Bitcoin miners has not been developed yet. This puts a lot of mining operations at risk of sanctions.
"However, in Russia, in general, the legal framework for miners has not yet been developed, experts emphasize. In addition, sanctions risks are growing both in relation to Russian players and their counter-parties abroad," Kommersant noted. According to data from Bitriver, Russia’s largest mining provider, the new ranking that places Russia second is based on the power used by Russian Bitcoin miners.
The US Mining Operations Stalls
Apart from Russia, the United States has been facing deep issues relating to mining operations. This has greatly stalled progress in Bitcoin mining in the country. According to Bitriver CEO Igor Runets, the mining sector in America is bound to hit an iceberg if the right steps are not taken immediately. According to him, the US faces several issues because of the astronomical increase in power charges. Miners now find it hard to mine Bitcoin because of the expensive cost of mining them. Apart from the electricity costs, reduced profits, the expansive percentage of taxes, legal troubles, and over-leveraged businesses are contributing factors.
Speaking about over-leveraged businesses, Bitriver CEO Igor Runets said, "In addition, the vast majority of equipment was purchased by American miners on credit, so many over-leveraged companies are in the process of bankruptcy or have already gone bankrupt."
Recently, the Biden government proposed taxes equal to 30% of the electricity costs used in mining Bitcoin and other digital assets. According to those who are proposing this law, they would be expecting it to go into effect in 2024. Assuming this law is signed into law, it would see a 10% tax charge in the first year, then 20% in the second year, and subsequently 30% in the third year.
Bitcoin, on its own, hasn't been doing well recently. After testing $30k levels, the apex cryptocurrency experienced some massive bearish trend which saw its price reduce to a little over $27k at the time of writing. In the past 24 hours, Bitcoin's price has only increased by about 0.54%.