Russian Crypto Company Opens Bitcoin Farm In Siberia
The Russian crypto-currency company BitCluster has begun farming in an unlikely city that is in the Arctic Circle, but the reason behind the decision makes a lot of sense.
Cryptomining is essentially a process of auditing bitcoin transactions and making sure the digital currency isn’t used twice by the same user. The reward for regulating spending of the emerging currency is new cryptocurrency.
This process can be very profitable because of the growing value of cryptocurrency, and BitCluster has gone to the Polar Circle to maximise its profits.
The Siberian city of Norilsk is now home to the Artic’s first bitcoin farm. The city is home to 180,000 people, is heavily polluted and as many would have guessed, extremely cold. The city has a 9-month long winter, but it appears to be the ideal location to set up a crypto farm.
The temperature in the city, which can be as low -40°C, was a large part of the decision to begin operations in the location. The cold minimises the cost of cooling the machines that are used for mining. The cost of the electricity powering the machines is also significantly cheaper in the city than the rest of Russia.
Nickel mining has previously been a central part to the economy of Norilsk, and the result of this industry is an independent power grid that supplies electricity to the city at a rate that is 25% cheaper than the rest of Russia. This benefits the operations of BitCluster and means that they can run their auditing process cheaply.
For every block the company mines they are rewarded with 6.25 bitcoin. This may not sound like much, but with the increasing value of Bitcoin, and the expectation that the currency will continue to grow this endeavour could prove to very profitable for all parties. The continued value in the digital currency has been attributed to its independence from conventional financial institutions that are impacted by global events and governing bodies.
Norilsk may not sound too appealing to those who enjoy the sun and warmth, but it is clear that the city offers crypto-currency companies an appetising proposition. It will be interesting to see if other companies make similar moves to freezing locations and whether a traditional mining city like Norilsk will become popular for a new kind of excavation.
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