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Bitcoin mining’s future is green, and Russia has the best chance

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Last month, Chinese President Xi Jinping, declared that China has plans to become carbon neutral by 2060, calling for a “green revolution.”

If the plan is properly implemented, it could help China to finally shed its biggest-polluter status and significantly improve the global ecosystem, which could also drastically shake up the country’s eminent Bitcoin (BTC) mining industry.

The most well-known mining hub of China is the Southern province of Sichuan, which has an abundant hydroelectricity sector. However, the electricity there is especially cheap only during the wet season, which takes place between May and September. Outside of that period, most miners migrate up north to Xinjiang and Inner Mongolia, which currently generate over 40% of the total Bitcoin hash rate. Unlike Sichuan, however, those desert regions depend mainly on non-renewable sources of energy such as coal. If the government proceeds to push for net-zero carbon dioxide emissions, mining there will become inefficient, and local players will be left with much fewer options.

The future of Bitcoin mining is green

As the world has finally learned the hard truths of climate change and human-caused emissions of carbon dioxide, having constant access to renewable energy is going to become one of the most important factors in Bitcoin mining. But are there any locations that can cater to this requirement?

Let’s take a look at the Bitcoin Mining Map that indicates a close estimate of the geographic distribution of the global BTC hash rate. China, of course, is the uncontested king, making up more than 65%. Following China are the United States, Russia and Kazakhstan, which are neck and neck at 7,24%, 6,90% and 6,17%, respectively.

The Commonwealth of Independent States, os the CIS region, which includes both Russia and Kazakhstan, seems to be particularly overlooked by international players, mostly due to a lack of information about local mining scenes.

Akin to Northern China, Kazakhstan’s electricity is produced mostly by coal power plants. It’s cheap, but not sustainable. Also, the local government has been interfering with the electricity market by lowering tariffs and cost, meaning that they might eventually bounce back.

Russia, on the other hand, has lots of natural prerequisites for cheap renewable electricity, as well as a more stable economic environment.

Cold and energy rich

If you ask me to name one thing that the Soviet Union was good at, I’d say industrial infrastructure.

Most of Bitcoin mining in Russia takes place in the famous Siberian region, which has also been a key spot for aluminum production since the 1960s. Because energy is consumed at all stages in the production of aluminum, the USSR chose to build Siberian smelters along with hydropower plants (Russia hosts as much as 9% of the world’s hydro resources, mostly in Siberia and the far east).

Aluminum smelting technology has evolved since then, making production much more energy-efficient. That, along with the fact that the Soviet government often left room for future growth when building infrastructure, is the key reason why the region has so much excess power these days. According to RusHydro, the world’s second-largest hydroelectric power producer, the total installed capacity of hydropower units in Russia is currently approximately 45 million kilowatts. More specifically, hydropower plants in Siberia are estimated to produce almost 10% of the total output of all power plants controlled by the Unified National Energy Network.

Another key aspect is Siberia’s infamous climate, where it’s cold nine months of the year. If there’s anything that this kind of weather is good for, it’s hosting a datacenter stuffed with large ASIC units running at full capacity. Anyone who has ever tried running a mining rig at home during summer will likely know what I mean.

China is an ally

Russia’s vicinity to China is also a big plus, as the best mining hardware is produced there.

Historically, Moscow has had a strong economic relationship with Beijing, which continues to strengthen to this day. The shipping between the two countries is cheap, fast and constant: Freight trains and cargo aircraft continue to run despite the COVID-19 pandemic.

Now, imagine shipping thousands of mining rigs to the state of Texas from Beijing, considering that the U.S. is in a trade war with China and has slapped a hefty 25% tariff on imported mining equipment.

Related: China and US must learn from one another and collaborate on CBDC

Affordable efficiency

Continuing the comparison to the U.S., operating expense and capital expense costs of maintaining a data center are considerably lower in Russia, mostly because local labor and construction costs are cheaper.

Furthermore, if your rig breaks down, you don’t even have to send it back to China, wasting several weeks (which is considered ages in Bitcoin mining). Institutional-scale Russian facilities tend to have in-house repair centers with technicians trained directly by top Chinese mining hardware manufacturers, so they can quickly get everything up and running again.

Russia has been the third-largest Bitcoin mining country in the world for quite a while now, and the local industry has developed significantly.

Regulation is clearer than you might think

Hearing all of this for this first time, one might argue: But the Russian government has banned crypto. Well, that’s not factually correct. Let’s take a closer look at the country’s major crypto-related law, called “On Digital Financial Assets,” or DFA, that was signed into law in July.

The bill prohibits Russian residents from making payments in cryptocurrencies starting from January 2021 but legally recognizes them as “digital financial assets.” It does not mention cryptocurrency mining in any form, meaning that currently, there are no legal restrictions.

In early September, however, Russia’s Ministry of Finance reportedly proposed to amend the DFA law to prohibit miners from receiving payments in crypto for their activities. As the authority reportedly stated:

“Standalone crypto mining is legal, but it loses its financial value because the payment is usually processed in Bitcoins and Ethers.”

While no one knows if the amendments will get approved, what they imply is pretty straightforward: Russians can’t sell the coins that they mine, but they can legally host their hardware and other infrastructure for foreign players. Most likely, the change will affect mom-and-pop operations, since large-scale miners are normally paid in fiat currency. Moreover, operations whose clients are overseas can still be legally paid in crypto from abroad even if the proposed bill comes into effect.

Besides, regional authorities in Siberia are growing highly supportive of large mining operators because they pay taxes, create jobs, and put that excess energy to use. The truth is that the government is pro-business and has no interest whatsoever in destroying something that contributes to the economy.

At this point, the government has already met all the local large-scale mining operators mostly because the consumption of several megawatts of power is easily detectable by the electric grid operator (and naturally requires some sort of explanation). Earlier in August, the Ministry of Digital Development, Communications and Mass Media published a proposed bill that would establish additional control over data centers in Russia.

A skeptic would continue: But surely you will get scammed if you choose to mine in Russia. While doing business is never a risk-free activity, especially when it comes to the cryptocurrency industry, there are actually no reported cases of crypto mining-related scams in Russia. The police regularly shut down illegal operations that steal electricity, but the authorities never scour compliant operations who pay due taxes and costs.

Curiously, most stories about inconsistent mining players come from North America, which is generally considered to be a highly-regulated market. In fact, the region is littered with carcasses of mining companies that either suddenly went bust or turned out to be scams, disappearing with investors’ money in both cases.

The most recent example would be the Toronto-based HyperBlock, which abruptly closed down its 20-megawatt data center in May, saying that it had to cease operation due to the Bitcoin halving — despite the fact that it is a regular event that companies can prepare for well in advance. Similarly, in early 2019, U.S.-based major crypto mining and blockchain firm Giga Watt closed access and power to its facilities after allegedly failing to pay $300,000 in utility bills.

Is another mining boom imminent?

Sure, Russia could use some clearer regulation on mining (like most countries in the world), but this process will likely take some time. The most important thing is that the government has finally communicated its general attitude, which could be summarized in the following way: “We’re skeptical about the use of cryptocurrencies as a payment method, but are fine with the related activities that stimulate our economy.”

Consequently, it seems like Russians are getting ready for a mining boom similar to the one that happened in 2017. Local retailers have recently reported a 49% spike in crypto mining-related sales of graphic cards in August, and GPU sales registered from June to August are up 470% compared to last year, so things are clearly heating up.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Igor Runets is the founder and CEO of BitRiver, the largest colocation services provider for Bitcoin mining in Russia and the CIS region. After completing his MBA from Stanford, Igor returned to Russia to utilize his more than 10 years of experience in enterprise-class data centers and the excess hydroelectric power of Siberia to bring institutional-grade Bitcoin mining to investors around the world.



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Here’s Why Analysts Think Bitcoin Will Rally Towards $17,000 by EOY

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  • Bitcoin’s price has been caught within a consolidation phase around $13,000 ever since it was rejected at its recent highs of $13,200
  • This is around the price at which it has been trading throughout the past few days, with buyers and sellers being unable to take control of its near-term trend
  • Yesterday, bulls did attempt to set fresh yearly highs and kickoff a leg higher, but it resulted in a rejection
  • This shows that buyers don’t currently have enough support for another push higher
  • One analyst explained that a push towards $17,000 could be just months away, but it may first see some consolidation

Bitcoin and the aggregated crypto market are consolidating following Bitcoin’s recent rejection at its yearly highs.

The cryptocurrency has been unable to spark any sustained moves past $13,200, signaling that the selling pressure here is significant and may continue slowing its ascent.

Despite its short-term trend being somewhat unclear, there’s no questioning that Bitcoin’s macro trend is shaping up to be extremely bullish.

As such, one analyst is noting that a move to $17,000 could be just a couple of months away.

Bitcoin Consolidates Around $13,000 as Buyers and Sellers Reach an Impasse

At the time of writing, Bitcoin is trading down just over 1% at its current price of $13,000. This is around where it has been trading throughout the past few days.

Yesterday, bulls attempted to break this trend and propel it higher, but a move past $13,300 resulted in an influx of selling pressure that sent it reeling lower.

Its inability to see any sustained rally does indicate that the selling pressure it is facing above its current price level is quite significant.

Where it trends next should depend largely on whether or not it can push past the resistance laced throughout the lower-$13,000 region.

BTC Poised to See a Sharp Climb to $17,000, Claims Analyst

Despite this micro weakness, one analyst is noting that Bitcoin is positioned to see some major upside in the months ahead.

He is specifically pointing to $17,000 as a target that he expects to be reached by the end of the year.

“I think this is a likely scenario, not expecting a clear breaker above $14,000 yet. A retest of previous resistance zone to build momentum towards the next rally towards $17,000 beginning next year.”

Image Courtesy of Crypto Michael. Source: BTCUSD on TradingView.

The coming few days should provide insights into whether or not the resistance Bitcoin is currently facing will be enough to spark any selloff.

Featured image from Unsplash.
Charts from TradingView.





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How to build a crypto mining rig in 2020 to earn Bitcoin and Ether

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In a time of global crisis, a pandemic, and a generally unstable political and social environment, cryptocurrencies have shown remarkable stability. Moreover, the pandemic-induced economic downturn played into the hands of the industry by not only attracting professional cryptocurrency traders but also reviving mining as a way of generating passive income. 

It is not surprising that countries experiencing difficult political and economic situations have witnessed a boom in the purchase of GPU cards in recent months. In the region of Abkhazia, where all crypto activities have been illegal since 2018, citizens spent more than $500,000 on mining equipment over a period of six months.

Another factor that has worked to further popularize mining is strong crypto prices. Bitcoin (BTC) has risen by almost a third, while Ether (ETH), the most popular currency for mining, has added $150 to its price and the decentralized frenzy has meant that gas fees have reached unprecedented levels.

So, here’s how to design a cryptocurrency rig — and an exploration of whether it needs to be done at all, given all the associated risks.

Mining rig components

A cryptocurrency mining rig consists of a computer that has many graphics cards but no monitor. Computer cases are filled with GPU cards, a power-generating unit, a motherboard and a cooling system. If a monitor is connected, it can become a regular computer where a user can open a browser or play their favorite video game.

The rig is connected to the internet, and thus, the blockchain network. The network operates by itself to conduct monetary transactions using the power of the graphics cards. To be more specific, a mining rig consists of:

  • An ordinary motherboard, which has the capability of linking to a number of connectors for GPU cards.
  • A hard disk drive, or HDD, with 100 to 250 gigabytes of memory to house the cryptocurrency wallet, with an Ether wallet usually taking up 25 GB and a BTC wallet requiring 50 GB or more.
  • Several GPU cards, which are the most important components in a rig because they are the base that defines the cryptocurrency that a user will mine, along with their future profit and its timeline.
  • A power-generating unit. A rig with four GPUs often requires more than one power unit. Usually, miners have a few 750-watt units connected together.
  • A power adapter for GPU cards. Video cards are connected to the motherboard using special extension cards called “risers.” There are many different types and models of risers, but the PCI-E 1x version 006 is the most popular.
  • A power switch.
  • A cooling system, and it’s preferable to have several coolers to provide additional airflow.

Another important detail is the frame for the rig. It is better to make a frame out of wood or aluminum. The size of the mining rig will be slightly larger than its frame due to protruding parts, adapters and a cooling system. For example, a seven-GPU rig will be approximately 21 inches wide (53 centimeters), 12 inches deep (30 centimeters) and 12 inches high (30 centimeters).

After purchasing all the components of the rig, it’s time to design it, which is a rather easy task for a person who has experience with computer hardware. Additionally, there are plenty of guides on YouTube.

When a rig is ready, all that needs to be done is to install some software — i.e., to choose a program for mining the currency of preference. Another way is to find a mining pool, which is a popular way to mine, as it’s becoming harder to do so individually due to the rising complexity of crypto mining. There are also some tools available such as TeamViewer, for remote control, and WatchDog, which automatically restarts the system if the program freezes.

GPU card in the top

As a rule, one rig should include four to seven video cards — it’s a number that will not go beyond the framework of a stable operation, although there are exceptions. Miners can connect 10 to 15 GPU cards to one motherboard, but seven is the optimal number because Microsoft’s Windows 10 operating system can detect only this number of cards. But there is a solution: specialized mining software based on the Linux kernel. In that case, the key is to choose the right motherboard, such as an ASRock Pro BTC+ series or similar.

Determining which GPU cards are best for mining is not so straightforward, as the answer depends only on the amount of money that the miner has. In general, it makes little sense to buy the most expensive, powerful GPUs for the price of two to three slightly weaker ones, as there is a greater chance the cheaper ones will bring more benefits due to their low power consumption and initial cost.

The highest income in mining is currently achieved with Nvidia GeForce RTX 2080 Ti and AMD Radeon VII cards, but it is more profitable to build a mining farm with AMD Radeon RX 580 and Nvidia GeForce GTX 1660 Super cards, as they will pay off much faster.

Related: The top crypto-mining graphics cards to get a big bang for your buck

It should also be kept in mind that AMD RX series GPU cards can be flashed by changing the working time of the RAM, downvolting the core and overclocking. Programs such as MSI Afterburner and Sapphire TriXX can assist in making these manipulations, which will help GPU cards achieve maximum performance during the mining process.

Electricity in question

In over 10 years, the mining industry has turned from something incomprehensible and rather cheap to a professional, high-tech venture that implies high barriers of entry, not only for the equipment but also for its maintenance.

After purchasing mining equipment, paying the cost of electricity during its operation becomes the main expense that directly affects profitability. The energy consumption of one mining rig consists of the following components:

  • GPU cards, depending on the power and mining algorithm, consume between 360 watts and 1500 watts for a rig of six to seven cards.
  • The motherboard, power unit, HDD and RAM consume up to 100 watts.
  • The cooling system uses from 20 watts to several kilowatts when using air conditioning systems.

So, how can a miner reduce the cost of electricity? The main consumers of electricity are the GPU cards, and with the right settings, electricity consumption during mining can be reduced significantly. For example, when mining Ether, the main thing is to overclock the video memory. The most optimal operating mode for GPU cards is setting the core voltage to about 830 to 850 millivolts for AMD cards and 650 to 850 millivolts for Nvidia cards. Lowering the voltage on the core of the card, in addition to reducing power consumption, decreases the amount of heat, which has a beneficial effect on the equipment.

Power-generating units can also use less power if they have a “gold” certificate, which means they save a large amount of electricity (about 15%) compared with power units that lack them. Another way is to change HDDs to solid-state drives, which will increase the speed of loading the operating system and reduce the power consumption of each rig by five to 15 watts. Furthermore, modern RAM (DDR4 or DDR3L instead of DDR3) and processors can reduce consumption by another 10 to 20 watts.

A miner can also reduce consumption through slightly more complicated ways too, such as finding more economical electricity tariffs — for example, installing the rigs where there are reduced tariffs for consumers with electric stoves or electric heating and lower night-time prices. If possible, miners can even reach out to a power plant that generates electricity to find out if it has surplus capacity. Some miners can create their own solar or wind farms and use them for mining, but not everyone can afford such an investment.

Mining in the cloud

Keeping in mind the unstable situation in the economy, some may want to join the crypto mining community but cannot due to the high initial costs associated. Here’s where “hosted mining” can come into play, whereby cryptocurrencies are mined through a remote connection to equipment that has been rented out. Philip Salter, head of operations at Genesis Mining — a cloud mining provider — told Cointelegraph:

“Since mining is becoming more competitive, margins are shrinking and it’s harder for home miners to compete. Miners need to get every drop of efficiency they can, and that means growing the operation (economies of scale) and doing it somewhere where electricity is insanely cheap. […] Mining in the cloud seems like the only viable option for many.”

Hosted mining starts with a user choosing a provider of computational capacity. Then they enter into agreements with the company to connect to its equipment. After paying for computer capacity, miners are provided with access to remote mining of cryptocurrencies through rented equipment. So, users only need a computer and a fast internet connection to operate. Hosted mining commissions are charged in accordance with the agreements established between the parties.

This type of mining has a number of advantages, such as not requiring start-up capital, not needing to connect equipment by yourself, no costs of maintenance and electricity, the ability to disconnect from work at any time, and not needing special technical knowledge and skills.

There are also risks in cloud mining, primarily because, like any young industry, many rogue actors seek to take over the funds of ignorant users. So, when choosing a platform, users should spend time and carefully study its history and reviews.

Also, hosted mining brings in lower income compared with mining using one’s own equipment. Nevertheless, this is a possible option for those who really want to get involved in mining because, in any case, no one will give up an opportunity for passive income, even if it’s not too significant.

Buil it on your own

In summary, it can be said that today, mining seems to be an attractive way to make some income. If for some reason hosted mining is inconvenient, then setting up a personal rig is not too difficult. This will require an initial investment and a little time to figure out how the system operates.

Randy Ready, CEO and chief technology officer of Mining Rig Rentals — a hardware mining rental platform — believes that building your own system certainly is more interesting, adding: “I suggest going with a small rig and potentially going larger once you are familiar with mining and have a stable profit.”

Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.



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3 reasons Bitcoin suddenly dropped 3% in 1 hour and recovered

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Three factors likely triggered a quick decline in the price of Bitcoin (BTC) on Oct. 25. First, traders pinpoint the $13,300 to $13,500 area as a major resistance range. Second, futures and options markets are neutralizing. Third, weekend trading is seemingly amplifying volatility.

The $13,300-$13,500 range is a key resistance area for Bitcoin in the short term

Before the sudden price drop occurred, BTC soared from $13,127 to $13,350. The dominant cryptocurrency rallied swiftly to an area of interest for sellers as more miners moved BTC to exchanges.

Throughout the past week, data from ByteTree shows Bitcoin miners have been selling more than they mine.

BTC possibly saw a sharp correction as it surged to a key resistance range, which sellers aggressively defended.

Some technical analysts anticipated the price of Bitcoin to rise to around $13,500 before seeing a pullback. Before the volatile price action occurred, cryptocurrency trader Cantering Clark said:

Upside borrowing/leveraged long exposure will be more prevalent the further up this goes, but right now futures are consistently extended from spot and the friction is obvious. Maybe get one more pop up 13.5-13.8 before a nice sized pullback.”

2-hour price chart of Bitcoin with key support levels. Source: TradingView, Michael van de Poppe

Futures and options markets are neutralizing

After the week-long rally, the futures market started to show signs of overheating. Although the funding rate of BTC remained at an average 0.01% level, alternative cryptocurrencies demonstrated high funding rates.

The overall cryptocurrency futures market needed pullback to reset or cool down the funding rates of top cryptocurrencies. The Bitcoin Fear and Greed Index is also showing “extreme greed” in the market, which makes a healthy pullback a positive trend for BTC.

Bitcoin Fear & Greed Index. Source: Alternative.me

Weekend trading typically spurs volatility

Meanwhile, the options market also faces expiration worth $750 million in about six days that could trigger volatility.

During the weekend, particularly on a Sunday, the volatility of Bitcoin and the cryptocurrency market tends to increase.

There are many potential factors that could cause volatile price movements to occur. Two main factors are lower the volume during the weekend and the anticipation of the Sunday weekly candle close.

If the price of Bitcoin stays over $12,000 in the next 15 hours, it would mark the first weekly candle close above $12,000 since January 2018.

Weekly price chart of Bitcoin. Source: TradingView.com

As such, while BTC continues to see high volatility, the optimism surrounding its high time frame log charts are buoying the general market sentiment.

One popular technical analyst known as “Squeeze” emphasized that the macro view of Bitcoin remains optimistic, particularly as exchange BTC balances continue to drop reducing available supply. He said:

“Bitcoin’s macro view remains bullish as the Exchange $BTC Balances continue to decline sharply since March (whales are not yet selling. Even at $13,000.) There’s also around 136k BTC currently locked in WBTC/RenBTC.”





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