Looking into How Cryptocurrency Miners in Russia Get By Using These Tips
Russia has been clamping down on cryptocurrencies over the recent past. It is tightening its regulations for both mining and usage of cryptocurrencies. This has caused many challenges and complications for domestic miners.
Nevertheless, miners are still active in Russia. It is difficult, but it is not impossible. Here is how cryptocurrency mining is done in Russia.
There Are Restrictions For Equipment Imports
The cryptocurrency mining equipment market in Russia has been in a rollercoaster. Prices of equipment dropped sharply in just several months to the delight of miners. However, miners are now grappling with strict import regulations some of which are already in place and others that are yet to come.
The Federal Customs Service recently passed regulations requiring importers to get licenses from Russia’s Ministry of Industry and Trade for imported equipment. This not only raises logistical complications but also the prices of equipment considering the additional legal costs.
Tax Rates Are High
Mining cryptocurrency in Russia is a costly affair especially considering the high tax rates. The government demands 13% of all revenues generated from mining on any given cryptocurrency.
This tax also extends to crypto trades and transactions that may not necessarily generate income. These legal complications have brought up financial complications that are proving to be frustrating to many miners. Worryingly, Russian lawmakers are making plans to pass even stricter cryptocurrency tax laws.
Energy Costs Are Inconsistent
Electricity infrastructure has been one of the key pillars for Russia’s economy. To this end, the country’s national electric grid is complex – the country even produces more electricity than it needs. However, energy costs are inconsistent and vary from one region to another. They also fluctuate with time especially depending on the weather.
As such, miners in certain regions often find themselves grappling with high energy costs – of course, it doesn’t help that cryptocurrency mining equipment consume lots of energy. However, it is important to point out that some miners use illegal electricity lines in a bid to cut costs – this, of course, comes with a host of legal implications.
It All Goes Down in Mining Hotels
The stringent cryptocurrency mining regulations in Russia make it virtually impossible to mine from one’s apartment. The next best alternative to one’s apartment is a mining hotel.
Mining hotels allow users to rent out space to set up their mining rigs. Most require miners to bring their own mining equipment while some offer both equipment and mining services. The hotels also handle all legal requirements collectively for all their tenants.
Prices for mining hotels vary from hotel to hotel but mostly range between $50 and $100. Demand for mining hotels has also been rising sharply over the recent past as more people seek to escape the stringent regulations.
Russia has a robust cryptocurrency economy in spite of the increasingly stringent legal regulations. These laws are especially restrictive for miners who have to take unorthodox measures to mine cryptocurrencies.
Miners can get by for the moment, but the government’s plan to pass even more stringent laws is causing uncertainty.