JAKARTA – Russian Bitcoin (BTC) miners are reported to be operating as usual despite their government's invasion of Ukraine, Thursday 24 February.
According to estimates from the Cambridge Bitcoin Electricity Consumption index, miners in Russia accounted for around 11.2% of the global BTC hash rate in August 2021. With sanctions on the Russian government emanating from the US and NATO countries, it is unclear how the local BTC sector and market will operate. wider area will be affected.
While some crypto mining companies like Ethereum-focused Flexpool have suspended their services in Russia in response to the invasion. Miner BTC Compass Mining confirmed to customers hosting in Russia that its mining infrastructure will continue to operate in the region.
Compass Mining CEO Whit Gibbs expressed his thoughts and prayers to all those affected by the conflict, on Twitter earlier today, as he reassured the public that his facilities in Eastern Europe are located safely in Serbia, far beyond “geopolitical unrest.”
I want to reassure our customers hosting in Russia that we are in constant communication with the facilities, which are in Siberia and well isolated from any geopolitical unrest. Compass has confirmed with our partners that all miners are safe and will continue running as normal.
— Whit Gibbs (@BitcoinBroski) February 24, 2022
The Joe Biden administration outlined last Thursday that it would impose "widespread financial sanctions and strict export controls" on Russia's top financial institutions, government, top officials and the technology sector.
However, these severe sanctions have not yet extended to the SWIFT international payment network or cryptocurrency transfers. Many viewers argue that this could be a time when the Russian crypto sector is growing as it could soon become an important tool for evading sanctions.
In a previous newsletter to investors, BTC bull and Morgan Creek digital co-founder, Anthony Pompliano, emphasized that the Russian government could use this moment as an opportunity to move away from the US dollar reserve system, and support a decentralized currency with global appeal.
“This game theory brings us to Bitcoin. The next best option to become a global reserve currency producer and distributor is to become a user and holder of the most advanced global reserve currency that is not controlled by a single country,” said Pompliano, as quoted by Cointelegraph.
“That incentive made this superpower realize that Bitcoin will be important for decades to come. Countries that have large shareholdings, along with mining and other pro-bitcoin activities in their countries, will have a significant advantage,” he added.
VanEck's head of digital asset research, Matthew Sigel, echoed similar sentiments to Bloomberg. He noted that the Bitcoin network would allow Russia to mitigate the potential losses caused by the shutdown of the Western financial system:
“Neither dictators nor human rights activists will face any kind of censorship on the Bitcoin network,” Sigel said.
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