Former Soviet Metal Construction Plant ‘BitRiver’ is Mining Bitcoin
BitRiver, the largest data center in the former Soviet Union, opened about a year ago in the Siberian city of Bratsk and most of its clients use the facility to mine Bitcoin (BTC), as it has been reported by Bloomberg on November 24.
Former Soviet Metal Construction Plant Is Now Mining Bitcoin https://t.co/V4Zpz4MyJu Bitriver hosts mining machines in the former world’s largest aluminum smelter https://t.co/dUtxFPgeyq News pic.twitter.com/GHnEkgBeUq — CryptoPost (@crypto_PST) November 25, 2019
The data center allows cryptocurrency miners to take advantage of cheap energy in what once used to be the world’s largest aluminum smelter.
However, the plant was built by the USSR in the 1960s with the still-active hydropower plant to power its operations.
The data center’s location also benefits from a cold climate, allowing mining hardware to work at higher efficiency rates while cutting cooling costs.
Oleg Deripaska, the Billionaire and President of Rusal, the world’s second-largest aluminum company, reportedly had the idea of building the data center about five years ago and directed his company Rusal, alongside aluminum and power producer En+ to repurpose the facilities.
Though it is not clear that whether Deripaska has any connection to the mining operation now, En+, in which he and his family own a 45% stake, supplies up to 100 megawatts of power to the facility enough energy to sustain 100,000 homes.
The plant is one of the largest hydropower plants in Russia and the data center allows it to constantly sell excess energy and diversify its client base.
So, according to Bloomberg, Russian law does not recognize cryptocurrency mining. Because of this legal gray area, BitRiver does not directly engage in mining, but only provides equipment and technical services to its clients, including from Japan, China, and the United States, operating like any other data center.
However, BitRiver is paying for the power 2.4 rubles per kilowatt-hour, equivalent to about $0.038 without value-added tax and sells it at 3.5 rubles ($0.055) per kWh to miners. For comparison, the average price of electricity in the United States is about $0.12 per kWh.
It has been analyzed that Bitcoin and the overall cryptocurrency market saw a significant drop in price earlier this week, as BTC briefly fell under $7,000. Still, miners are seemingly keen to continue boosting their capacity.
Likewise, Alistair Milne, the Bitcoin entrepreneur, commented:
“There is NO miner capitulation.” Alistair Milne
“They are acutely aware of the upcoming halving and are apparently unphased by the recent dip.” Alistair Milne
Thus, it has been reported that Northern Bitcoin, the German Bitcoin mining firm, has entered a merger agreement with United States-based competitor Whinstone to jointly build what will supposedly be the world’s largest mining farm.
Source: bloomberg.com | investforesight.com | cointelegraph.com