According to experts, crypto mining farms that were established at oil fields in Russia are now using an energy capacity of about 85 megawatts (MW).
According to a report, even though Western sanctions have created some issues, investors are still thinking about expanding projects that would use 200 megawatts (MW).
Energy use for crypto mining
The oil fields in Russia have become a hotspot for establishing crypto mining centers and they are using about 85 megawatts (MW) of energy, which stands at 23% of total consumption.
Small power plants provide the electricity supplied to these crypto mining farms, which is generated through the burning of associated petroleum gas (APG).
This is a by-product obtained through black gold extraction, which has to be disposed of by oil companies.
They do not incur any costs for doing so, but this can be sold to crypto miners. The APG that is utilized by Russian oil producers for powering facilities at oil drilling sites is about 17 billion cubic meters per annum.
The APG miners were able to generate an income of about 400 million rubles in the month of July, which is equal to $6.6 million, which considers the price of one BTC to be around $20,000.
Keeping this price in mind, the annual revenue that can be generated from July 2022 to July 2023 is 4.8 billion rubles, or $79 million.
The annual income that can be generated in six years would be around 1.16 billion rubles, or $19 million.
Analysts have predicted that there could be a tenfold increase in the APG mining industry. If even 1.6% of the gas is used for mining purposes, it would double the annual income of the miners to 2.5 billion rubles.
If even one-third of the total APG is used for crypto mining activities, there would be a 25 times increase in the sector and revenue would climb to about 30 billion rubles per year.
However, it should be noted that the crypto mining business in Russia has encountered some problems because of the sanctions imposed by Western nations due to its conflict with Ukraine.
Russian crypto users have had their transactions via crypto wallets restricted in the European Union and a number of international crypto exchanges are not allowing Russian users to access their platforms.
A different country
Experts have suggested registering a mining entity in a different country as a way of getting around the sanctions, but even that might not be so effective.
This is evident in the Bitriver situation, as the Swiss-registered firm that operates a number of data mining centers in Russia, found itself a target of US sanctions back in April.
This is because the US Department of Treasury was concerned that Moscow may try to monetize its energy sources through the minting of digital coins.
Russian companies are also facing difficulty in importing equipment used for crypto mining because of international restrictions. But, investors are still planning on expanding capacity to 200 MW.