TheBRICSsummitinKazan,Russia,raisedtheissueofinternationalsanctionsandcapitalcontrols.Bitcoin(BTC)miningwasraisedaspotentiallybypassingthesanctions.
BRICSmaybringbackdominanceinBitcoin(BTC)miningandusethevaluablecoinsasbettingchipsforinternationalfinance.TheformationofaBRICSgroupasanalternativetoWesterneconomicregionsraisesthequestionofsanctionsandcross-bordercapitalcontrols,whichareoftencircumventedwithcryptousage.
IfBRICScountriesmanagetomineBitcoin,theycouldfindbuyersandbypasssomeofthesanctions,expertssuggested.Thistimearound,BRICScountriesmaynotrelyonvoluntarymining.RussianminerswereamongearlycryptoadoptersandusersinthefirstyearsofBitcoin,butthecountrymayaimtobecomeabiggerplayerinmininggeopolitics.
Despitethefearsofexperts,itishighlyimprobablethatBRICScountriescouldfloodthemarketwithnewlyminedcoins.Withatransparentblockchain,someofthetransactionsmaybetracked,andexchangescanchoosetoblacklistwallets.BTCisalsotraceableandexchangesmayrefusetocarryouttradesiftheoriginofthecoinsisunknown.
EvenOTCtradesmaynotbefreelyavailable.Cryptocoinsandtokenshavebeenusedtobypassbordercapitalcontrols,buttheymaynotbeenoughtobypassglobalsanctions.OnlyVenezuelahastestedusingstablecoinsasanalternativeforoilsales.
Russiapreparesfortighterstatecontrolonmining
Russia’sbiggestdatacenteroperator,BitRiver,hasbuiltapartnershipwiththeRussianDirectInvestmentFundtobuildminingandAIfacilitiesacrossBRICSnations.TheshifttominingacceptancefollowsapreviouscrackdownonRussianminers,includingthoseinresidentialareas.
BitRiveroperates21datacentersinRussia,withanother10underconstruction.Thefirmhasreceivedstatebackinginadrivetoboostthenumberofreliable,high-powerdatacenters.Datacentercompetitionisaworldwidetrend,withtheUSAstillretainingthelead.
FromNovember1,Russiawillhavearegistrationregimeforlarge-scaleminingoperations.Miningfarmswillhavetoregisterwithtaxauthorities,whileindividualminerscangowithoutregistration,butmayfacerestrictionstoelectricityaccess.
Thestatealsopreservestherighttoissueatotalbanonminingactivities,ifdeemednecessary.Cryptominingisusingup1.5%ofRussia’selectricity,closetotherangeofUSminingtakingupbetween0.6%and2.3%oftotalconsumption.
CanBRICSminersreallycompete?
DespitethecallforBRICSminers,thosecountriesarelaggingwhenitcomestoBitcoininfrastructure.Brazil,Russia,India,China,andSouthAfricaarenotevenhostingBitcoinnodes,asseenonthelivemap.Thismaymeanminerslocatedinthosecountriesareusingothernodesasaservice,orlinkingtobiggerminingpools.
Miningoperationsarealsoblurringtheboundaries,asevenRussianfarmscanjoinanypool.Despitethis,poolslikeFoundry.USAreliesonlocalBitcoinproductionandhassomeofthemostdevelopedmininginfrastructure.
NewlyminedBTCmayalsobehighlyvaluable,asithasnotbeentiedtoanyusersorwallets.BRICSminerscouldsellthecoinsontheOTCmarket,orusethemfortrading.TheproblemisthatBTCisnotvaluableenoughtosustainat-scaleinternationaltrading,atleastnotatitscurrentprice.
BRICScountrieshaveoneadvantage–mostarehighinthecryptoadoptionbusiness.Russiahasanindexof7,surpassingmostEuropeancountries.Indiaisrankedat1,duetoretailusageandmemetrends.Othercountriesalsousevariouscryptoassets,despitegrayareasinregulations.ChinahasgrownitsusageofUSDTfortradingande-commerce,butalsoasaninformaltooltobypasscapitalcontrols.
However,BRICScryptomarketsarewildlydisparateandmaynotturnintoaunifiedblocofminers.Additionally,eveniftheycouldminesuccessfully,theBitcoinrewardshavefallento3.125BTCperblock,limitingthepotentialearnings.TheoneadvantageisthatBitmain’smachinesmaybeeasilyaccessible.Beijing-basedBitmainhassofarnotdeniedanyinternationalminerstheirshipments,andsuppliesmostofthebigminingfarmswithequipment.
cryptopolitan.com