Russian Miners Sell Their Equipment Amid Market Plunge
A growing number of Russian miners are looking to sell their hardware. The recent market correction has decreased the profitability of minting digital coins, especially for enthusiasts who are mining in their homes, basements and garages.
Russian Miners Selling Used Hardware
Amateur mining used to be very popular in Russia, where electricity rates for individual consumers are pretty low. In some Russian regions prices are currently below $0.01 per kWh. The cryptocurrency market sell-off of the last few weeks, however, has squeezed the profitability of small-scale mining operations, as the value of most cryptocurrencies has decreased significantly.
In just two days last week, the number of ads selling secondhand mining rigs increased by 25 percent, according to data shared by the popular Russian online marketplace Youla. But since the beginning of the year, searches for video cards on the platform have fallen by almost a quarter, according to Russian daily Izvestia.
GPUs, or graphics processing units, are used to mine some of the altcoins that don’t require massive computing power. Yet demand has fallen about 2.5 times for GPU mining rigs since the start of the year, and Youla has noted a threefold decrease in the number of searches this year for more specialized equipment, like rigs with application-specific integrated circuits (ASICs), which are capable of mining cryptocurrencies that require more hashing power.
Mining hardware prices have also fallen significantly. The average price of a single mining rig was around 240,000 Russian rubles (~$3,500) in January, but they now sell for just 150,000 rubles (~$2,200), or roughly 37.5 percent less.
This year has not been particularly kind to cryptocurrency investors and miners, with the price of BTC falling around 80 percent from last year’s all-time highs. The diminishing returns have forced some miners out of business, with a number of media reports from China referring to companies that have been selling their equipment.
Cryptocurrency mining in Russia has expanded rapidly over the last few years; in many respects, it has already become an industrialized business. Home mining has also become a source of income for a number of crypto enthusiasts. But many Russian miners have started to question whether they can continue to mine for much longer, as their profits have been sliding.
Mining operations, like many cryptocurrency-related businesses, are still unregulated in Russia. According to recent reports from Moscow, the term “mining” has been dropped from the draft legislation on digital financial assets that is now under review in the Russian parliament. That means mining could remain unregulated for some time.
In general, the authorities in Moscow have indicated that they have a much more positive attitude toward crypto mining than the use of cryptocurrency in general, as mining does not contradict Russian law. Proposals have been made to introduce a preferential tax regime and even tax breaks for miners in the energy-rich country. Digital currencies, on the other hand, are considered “money surrogates,” which are illegal under the current Russian legislation.
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