MOSCOW (Reuters) – Four thousand kilometers from Moscow near the banks of the Angara River, a Russian company operating a large data center run on cheap local hydroelectric power is benefiting from surging bitcoin prices and expects the double its power output this year.
BitRiver will host equipment at its renowned 100-megawatt data center in the city of Bratsk, along with other smaller sites, for foreign miners of the cryptocurrency from the United States, Europe and Japan who want to use make the cheap energy of the area.
The company could already rely on as much as 2% of global bitcoin mining, CEO Igor Runets estimated, but said it was difficult to get accurate figures in the sector.
The price of bitcoin has gone up almost 300% since the beginning of November and raised $ 50,000 for the first time last month, as Tesla Inc bought $ 1.5 billion worth of bitcoin and other major companies followed and small traders’ museums into the fund.
Bitcoin is earned – or ‘mined’ – by using your computer to help process the “blockchain” or digital trading records that underpin the currency.
This requires a large computing capacity, and a lot of electricity, so it is mostly done with large appliances in aircraft hangar-sized warehouses in the colder climate of Iceland, Canada, head of northern China and Russia, where it costs less to circulate the heat generated.
The benefits for those who can verify transactions in the process of making bitcoins have never been greater.
“Current demand from our clients exceeds 700 megawatts and comes close to one gigawatt,” Runets said. “We will continue to build data processing centers. By 2021, we expect to reach 300 megawatts of power. ”
Another 100-megawatt plant is already under construction in the nearby Buryatiya area, Runets said.
Major contracts with foreign companies, such as one last December in which 14 fully equipped trucks arrived in Bratsk, can boost the local economy and are a sign that BitRiver has grown into a global player, he said. in company video.
VOLATILITY BITCOIN
Russia granted legal status to cryptocurrencies last year, but banned them from being used as a means of payment.
“The current legislation in Russia will not hinder us in any way,” Runets said. “It will allow us to keep the computing equipment of foreign clients on the territory of Russia with settlements for this in dollars or rubles.”
This arrangement reduces the financial impact of bitcoin price movements on BitRiver.
“When bitcoin falls or rises, my profit, my income is virtually unchanged,” Runets said. “This financial stability in a volatile market is very valuable.”
More liberal legislation would bring more investment from Russian players, Runets added, which could help BitRiver improve its 2.5x revenue growth year-over-year in 2020. It declined further speculation. publish financial information.
One of the main concerns of bitcoin miners is their carbon footprint. Runets said BitRiver uses more than 90% green power as it builds data centers in regions with surplus electricity and renewable energy sources nearby.
Russia accounts for about 7% of the world’s bitcoin mining, according to Alexander Brazhnikov, executive director of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain, a figure that does not include gray market players and those which illegally connects to power grids.
Kazakhstan is dependent on a similar figure, while China is the market leader.
Edited by Katya Golubkova and Alexandra Hudson