Longrid on the history of Russian mining and the relationship of regulators to it
The world has been familiar with cryptocurrencies for only 10 years. At the same time, in the history of mining for these 10 years, several technological eras can already be traced. The approach to mining, or rather, to devices for it, has changed many times with the advent of the next generation of chips suitable for creating crypto assets.
A similar situation with the number of miners. At the dawn of Bitcoin, only a handful of enthusiasts were involved in the process. A few months later, the number of prospectors of the new gold rush began to increase with a truly cosmic speed. And then some of them left the community with the same speed at the next rate drop.
Despite the fact that this phenomenon is only 10 years old, today we can already talk about the history of the phenomenon, some of which, without a doubt, has turned into a beautiful financial legend. No less interesting is the history of mining in Russia, which, like in some other countries, is closely related to the legal status of the crypt, tricks of miners, and the cost of electricity. Under the cut, a nostalgic longrid about mining in Russia.
In 2008, the mythical great and terrible Satoshi Nakamoto (presumably a group of developers is hiding under the name) published the first file that describes the protocol and principle of the payment system, which worked as a peer-to-peer network. The legendary creator himself claimed that the development was started in 2007. In 2009, the development of what we know as Bitcoin was completed.
')
Since that time, the occupation, which we call mining today, counts down. In 2009, few knew about mining. In the vastness of our vast already in 2009, a small group of industrial crypto enthusiasts appeared, many of which, by a strange coincidence, were participants in the Tor network. At the same time, I know for sure that already in 2010 a full-fledged community of Russian miners began to take shape.
In 2009 - early 2010, the complexity of the blocks was such that ordinary processors were quite enough for mining. This was a standard SHA256 hash calculation operation, which is always performed and is not specifically related to crypt mining. It was mining on processors, according to the creators of Bitcoin, as on the most popular chips on the planet, that should make Bitcoin truly decentralized.
For what reason, the ability to produce something that in the future may be valuable on home computers has not become a popular activity in Russia at the dawn of bedside mining, for me it is still a mystery. Although, perhaps, in 2010, when the first publications on Russian-language resources and blogs began to appear, the society was not yet ready to accept non-fiat money.
In the short years of wild mining, cryptocurrencies, which got their name thanks to one of the publications in Forbes, were perceived solely as fun for geeks. It is difficult to imagine a serious economist or market analyst in 2010, who somehow seriously discusses cryptocurrencies.
This feature had a big plus. No one at the top thought about the legality of bitcoins. There is an assumption that before the start of hype in 2012, they did not notice this phenomenon at all.
The excitement around mining was growing fast enough, which led to a rapid increase in the complexity of the blocks. In July 2010, the Bitcoin exchange rate exceeded the psychological mark of 10 cents, respectively, mining the block brought about $ 5. It is known that in July 2010, a user with the nickname ArtForz launched a mining farm on the GPU and was able to get the first block using the parallel calculations implemented in the OpenCL driver.
By September 2010, a GPU miner based on CUDA (for nVidia) was freely available, and a month later there was a general access to the miner based on OpenCL (for ATI Radeon). Relatively little time passed and by November, the first GPUs for mining began to be used by miners in Moscow and St. Petersburg.
By 2011, mining became predominantly GPU-based. It was GPU mining on the often artisanal, “bedside” farms that became the most popular in Russia. Mainly due to its accessibility and rationality.
Dual-processor computers, for all their attractiveness for mining, were many times more expensive than a ready-to-work farm with higher productivity. And billions of 32-bit instructions per second rushed in, creating more and more complex blocks.
Mining gained such popularity that by the middle of June 2011, the complexity reached 1,000,000. In Russia, due to the relatively low cost of electricity, the growth and activity of miners were especially high during this period.
By 2012, the Chinese neighbors thought of using farms and solar panels in a tandem, many of our compatriots liked the idea, but meanwhile forgot about the average number of sunny days in the European part of Russia.
The process was hacked by hacking MtGox and a number of other services related to bitcoin, which cooled the ardor of prospectors of “BTC-mines”, however, over time, the number of the community not only recovered, but again began to increase rapidly, which increased the mining power.
In the short century of GPU mining, sellers of video cards really got rich. It soon became known that AMD's standard GPUs in mining tasks showed greater performance (GH / s for $.) Than NVidia products. Therefore, they were the first to disappear from the market, causing episodic periods of shortage. Interestingly, NVidia was also quite difficult to find during this period, although their performance was lower.
Already in the era of ASIC miners, the shortage of video cards in Russia was repeated several times and took on truly apocalyptic forms. So in 2017, Russian miners bought up 3 million video cards. Widespread comments of gamers from the cycle:
IT publications, for example, hacker.ru and the blogosphere have shown interest in mining up to this point. However, this was not systemic. The first articles about crypt on the habr, at least currently available, appeared in 2011. Somewhat later, tjournal.ru users began to actively write about this.
Already mentioned by hacker.ru, for example, in 2011, he managed to hastily bury Bitcoin. The article, as far as I know, did not have the effect of an exploding bomb, because everyone who needed to know about hacking before it. At the same time, it is likely that the publication has discouraged the desire to engage in mining for many, as well as in general to communicate with cryptocurrencies.
The Russian government began to somehow noticeably respond to cryptocurrencies only two years later, at the end of the three-year era of “bedside” GPU mining. So, on January 27, 2014, the Bank of Russia press service issued a newsletter “On the use of“ virtual currencies ”, in particular, Bitcoin when making transactions, in which the regulator recalled that:
It did not directly indicate that mining is the issue of monetary surrogates, but it was hinted at extremely opaque. The style of the message and the position regarding cryptocurrencies suggest that the author of the text was Nabiullina. It will subsequently become the most systemic and ardent opponent of mining and cryptocurrencies in Russia.
Even at the dawn of GPU mining, many began to criticize video cards for irresponsible power consumption, the need for constant monitoring, additional costs and tedious maintenance. An obvious solution to the problem was the use of FPGA chips, whose energy efficiency exceeded both the CPU and GPU.
They were conveniently combined into a single computer system and connected in parallel on one board. The power and cooling requirements of these microchips were incomparably lower than those for the GPU. In addition, the compactness and stability of the device was a huge plus. The gain in energy consumption at the time of its appearance was thousands of percent.
Despite all the advantages of FPGA miners, in Russia they remained almost unclaimed, as well as in many other countries. The harsh domestic miner preferred the good old, proven GPU farms, with all the associated hemorrhoids.
Only a few became the proud owners of the Swedish KnC Mars with a capacity of 6 Gh / s, which appeared in September 2012. Devices from the Americans from Butterfly Labs: BitForce SHA256 Single with a hash rate of 832 Mh / s and Mini Rig with a hash rate of 25 Gh / s, generally went almost unnoticed in Russia.
The main reason, of course, is the cost and power, which many at that time seemed excessive. So Mars cost $ 6,000, and Mini Rig, for example, sold for $ 15,000. Behind these figures, no one wanted to see any prospect and think about the fact that the 20 watts per 1 Gh / s that these miners consumed was 20-30 times less than a farm with a similar performance. According to bits.media, users who started working with FPGA before 2013 were able to get, if not superprofits, then very impressive incomes.
The rapidly growing complexity of the blocks made FPGA miners ineffective. So, devices that did not catch hype have sunk into oblivion, not having time to show what they are capable of. By 2014 - 2015 they were almost completely replaced by ASIC devices, about which a little later.
There is also information about the effectiveness of FPGAs for mining young cryptocurrencies. In the photo, the FPGA miner of 2019.
As mentioned above in 2014, the Bank of Russia began to notice cryptocurrencies and react to them with rapid development and popularity with all kinds of statements. We can say that from this begins the reaction of the Russian authorities to the phenomenon. It began with the 2014 message mentioned, where cryptocurrencies were equated with money surrogates and wrote that "operations with" virtual currencies "are speculative." Also in 2014, the first deputy. Bank of Russia Chairman Georgy Luntovsky said that they are monitoring the Bitcoin system, and legislative regulation is planned.
George Luntovsky
The next stone flew into the gardens of crypto farmers in March 2015, when the deputy. Finance Minister Alexei Moiseev said that for the production and use of money substitutes in Russia will be punished. He ranked “virtual currencies” as a money surrogate (the term has long been used by the Russian establishment instead of the word “cryptocurrencies”), including bitcoins.
Alexey Moiseev
Also in 2015, for the first time, Vladimir Putin spoke about cryptocurrencies, who, speaking on the forum of IT specialists “Territory of Senses on Klyazma”, noted that there are “fundamental problems with the widespread use of cryptocurrencies today.” The President of Russia also noted that he learned about such problems from the head of the Bank of Russia Elvira Nabiullina.
On October 26, 2015, Izvestia received a message stating that the Russian Ministry of Finance wants to impose a penalty for the issue and circulation of cryptocurrencies, primarily bitcoins. The violators of the ban on mining wanted to be imprisoned for 4 years. The intentions of the Ministry of Finance have not yet become a reality.
A unique case occurred in 2017 in the Kostroma region. A criminal case was opened there for illegal banking activities (part 2 of Article 172 of the Criminal Code of the Russian Federation) in respect of 3 people. The suspects are blamed for the fact that they exchanged bitcoins for an amount exceeding 500 million rubles.
The indecisive and cautious position of the authorities is largely due to the position of the public. So, according to the results of the NAFI’s all-Russian study of public opinion, in 2016, only 20% of Russians were positive about the cryptocurrency ban. In 2017, the share of the population negatively inclined towards the “crypt” was below 10%.
In addition to loud criticism and criminal prosecution, there were crypto business advocates from various branches of the Russian government. For example, Art. scientific al. The Monetary Policy Center of the Institute of Physics and Technology at the Financial University under the Government of the Russian Federation, Ph.D., Valery Lopatin publicly defended cryptocurrencies, saying that the Bitcoin ban would close the path for creating and using domestic sidechain systems. And in this way many useful innovative projects will be buried.
Valery Lopatin
A deputy from the LDPR faction, Andrei Lugovoi, spoke in defense of cryptocurrencies and miners, who told his news agency “Moscow” that he was against a complete ban on cryptocurrencies in Russia. Also in defense of cryptocurrencies in Russia, Chairman of the Board of Sberbank of Russia, former Minister of Economics and Trade of Russia, German Gref, repeatedly spoke out.
Herman Gref
Over the past 4 years, the State Duma has repeatedly created working groups whose tasks included solving the issue of regulating cryptocurrencies. Judging by the news of 2019, lawmakers still want to ban mining and operations with crypto assets in Russia.
Despite the adoption of a number of documents, cryptocurrency in Russia remains in the “forbid cannot be allowed” position, due to the inability to effectively implement measures to control and regulate emissions (mining itself) on the one hand and operations on the other. Those. It’s foolish to introduce a ban that cannot be put into practice.
ASIC (Application Specific Integrated Cirquit) are chips designed to perform only one specific task. In this regard, they cope with it better than the rest. It is these devices that are widely used in mining devices today and they were able to almost completely replace GPU farms.
The problem of ASIC chips was expected to be difficulties in self-production, testing and commissioning. A long and laborious process makes the chips quite expensive. The beginning of the development of the first ASIC chips in the world dates back to 2012. Around the same time, pre-orders for the first ASIC miners appeared.
We can say that it is with ASIC in Russia, and in the world, that the era of industrial mining begins. Not so right away, but ASIC hype is beginning to overwhelm Russian crypto enthusiasts by mid-2015. And the rapid growth of the main cryptocurrency in the world in 2017 turns just a hype into a form of insanity on cryptocurrencies, and in particular on ASIC mining.
One of the cents of insanity is Irkutsk, where, due to the uniquely low industrial cost of electricity, almost half of the country's miners settle. The Irkutsk cluster has its drawbacks, such as the remoteness from the European part of Russia, the non-velvety climate, and in some places the electricity supply to industrial facilities is not very stable due to the worn-out cable economy.
However, such trifles scare a few and newly minted crypto miners go to Irkutsk as a klondike. Many people sometimes sell businesses, cars, and even apartments, acquiring the coveted ASIC devices in pursuit of a long bitcoin. One of the media miners of Irkutsk during the crypto fever of 2017 was Yuri Dromashko. Who sold almost everything and additionally took a loan to build a farm of 50 ASICs.
Yuri Dromashko
In 2018, the idea arose to create and maintain Russian mining pools in order to keep the crypt inside the country. The initiators were the Russian Association of Cryptocurrencies and Blockchain (RACIB) and its member organizations. Currently, the association is actively working on the creation of national pools.
Another impressive experience is the story of the creation of one of the first Russian
mining operators - BitCluster. The company is known for creating a network of mining hotels located in the northern regions of Russia, in Angarsk, Bratsk. By the way, it is in Bratsk that there is one of the largest cryptocurrency mining sites, designed for 120 MW. Today, the company hosts more than 8000 devices and according to my data, this is one of the few companies that successfully survived the “cryptozyme”.
The founders of the project were crypto-businessmen Dmitry Kikin, Vitaliy
Borschenko and Sergey Arestov. All three were successful in projects that did not relate to cryptocurrencies. Despite this, they well understood where the wind was blowing and for the 2016-2017th year they created their own mining and infrastructure project. Today, this company is actively promoting the idea of ​​the Russian crypto valley.
It is not known how realistic the ideas for creating large national pools and crypto-values ​​are realistic, but mining in Russia is livelier than all alive, contrary to the forecasts of cryptosceptics who once again buried it after the collapse of 2018. What happens next with mining in Russia is not known, while many large financiers and investors continue to believe in the global prospects of decentralized emissions and monetary mechanics based on constant deflation. In my deep conviction, no one has yet created or proposed a more progressive monetary system.
Existing processes demonstrate the ambiguous attitude of the authorities and the lack of effective legalization mechanisms. The phrase “Deny cannot be allowed” is more relevant than ever. Legislative initiatives regularly arise and fail when faced with the harsh reality of centralized emission and anonymity of cryptocurrencies.
Perhaps I missed some significant phenomena that existed in the Russian mining in an attempt to reduce this small post. I would be grateful if readers can help fill these gaps in the comments.
Photo content used:
konspect.blogspot.com/2014/02/mining-bitcoin-cpu-01.html
litecoin.club/ru/article/litecoin-mining-on-cpu
prostocoin.com/blog/cpu-mining
bin.ua/news/finance/finances/227533-gpu-majning-ethereum-bolshe-ne-prinosit-pribyli.html
cryptocurrency.tech/preimushhestva-i-nedostatki-majninga-na-videokartah-amd
www.cryptomining.net/page/21
bits.media/fpga_bfl_single
www.sciencedebate2008.com/fermy-dlya-mayninga-kriptovalyut-eto-uzhe-realnost
en.bitcoinwiki.org/wiki/%D0%9C%D0%B0%D0%B9%D0%BD%D0%B8%D0%BD%D0%B3_%D1%84%D0%B5%D1%80%D0 % BC% D0% B0
eadaily.com/en/news/2017/03/22/putin-dovolen-rabotoy-nabiullinoy-i-ostavlyaet-ee-na-novyy-srok
www.youtube.com/watch?v=AnsTqoU6HGM
www.economics-prorok.com/2019/07/%D0%B3%D0%BB%D0%B0%D0%B2%D0%B0-%D1%86%D0%B5%D0%BD%D1%82% D1% 80% D0% BE% D0% B1% D0% B0% D0% BD% D0% BA% D0% B0-% D1% 80% D1% 84-% D0% BF% D1% 83% D0% B1% D0% BB% D0% B8% D1% 87% D0% BD% D0% BE-% D1% 80% D0% B0% D1% 81% D0% BA% D1% 80% D0% B8.html
crazy-mining.ru/razmeshhenie-asic
top-mining-hotel.ru/list/6-bitcluster.html
irk.minerpoint.ru/majning-otel-data-centr
bitcluster.ru
tjournal.ru/news/51516-cbr-bitcoin-not-bad
whoiswho.dp.ru/cart/person/1932462
letknow.news/interview/yuriy-dromashko-mayning-na-videokartah-perezhivaet-seychas-samye-uzhasnye-vremena-15920.html
A similar situation with the number of miners. At the dawn of Bitcoin, only a handful of enthusiasts were involved in the process. A few months later, the number of prospectors of the new gold rush began to increase with a truly cosmic speed. And then some of them left the community with the same speed at the next rate drop.
Despite the fact that this phenomenon is only 10 years old, today we can already talk about the history of the phenomenon, some of which, without a doubt, has turned into a beautiful financial legend. No less interesting is the history of mining in Russia, which, like in some other countries, is closely related to the legal status of the crypt, tricks of miners, and the cost of electricity. Under the cut, a nostalgic longrid about mining in Russia.
The very beginning - CPU mining
In 2008, the mythical great and terrible Satoshi Nakamoto (presumably a group of developers is hiding under the name) published the first file that describes the protocol and principle of the payment system, which worked as a peer-to-peer network. The legendary creator himself claimed that the development was started in 2007. In 2009, the development of what we know as Bitcoin was completed.
')
Since that time, the occupation, which we call mining today, counts down. In 2009, few knew about mining. In the vastness of our vast already in 2009, a small group of industrial crypto enthusiasts appeared, many of which, by a strange coincidence, were participants in the Tor network. At the same time, I know for sure that already in 2010 a full-fledged community of Russian miners began to take shape.
In 2009 - early 2010, the complexity of the blocks was such that ordinary processors were quite enough for mining. This was a standard SHA256 hash calculation operation, which is always performed and is not specifically related to crypt mining. It was mining on processors, according to the creators of Bitcoin, as on the most popular chips on the planet, that should make Bitcoin truly decentralized.
For what reason, the ability to produce something that in the future may be valuable on home computers has not become a popular activity in Russia at the dawn of bedside mining, for me it is still a mystery. Although, perhaps, in 2010, when the first publications on Russian-language resources and blogs began to appear, the society was not yet ready to accept non-fiat money.
In the short years of wild mining, cryptocurrencies, which got their name thanks to one of the publications in Forbes, were perceived solely as fun for geeks. It is difficult to imagine a serious economist or market analyst in 2010, who somehow seriously discusses cryptocurrencies.
This feature had a big plus. No one at the top thought about the legality of bitcoins. There is an assumption that before the start of hype in 2012, they did not notice this phenomenon at all.
GPU mining - “farms” and “farms”
The excitement around mining was growing fast enough, which led to a rapid increase in the complexity of the blocks. In July 2010, the Bitcoin exchange rate exceeded the psychological mark of 10 cents, respectively, mining the block brought about $ 5. It is known that in July 2010, a user with the nickname ArtForz launched a mining farm on the GPU and was able to get the first block using the parallel calculations implemented in the OpenCL driver.
By September 2010, a GPU miner based on CUDA (for nVidia) was freely available, and a month later there was a general access to the miner based on OpenCL (for ATI Radeon). Relatively little time passed and by November, the first GPUs for mining began to be used by miners in Moscow and St. Petersburg.
By 2011, mining became predominantly GPU-based. It was GPU mining on the often artisanal, “bedside” farms that became the most popular in Russia. Mainly due to its accessibility and rationality.
Dual-processor computers, for all their attractiveness for mining, were many times more expensive than a ready-to-work farm with higher productivity. And billions of 32-bit instructions per second rushed in, creating more and more complex blocks.
Mining gained such popularity that by the middle of June 2011, the complexity reached 1,000,000. In Russia, due to the relatively low cost of electricity, the growth and activity of miners were especially high during this period.
By 2012, the Chinese neighbors thought of using farms and solar panels in a tandem, many of our compatriots liked the idea, but meanwhile forgot about the average number of sunny days in the European part of Russia.
The process was hacked by hacking MtGox and a number of other services related to bitcoin, which cooled the ardor of prospectors of “BTC-mines”, however, over time, the number of the community not only recovered, but again began to increase rapidly, which increased the mining power.
In the short century of GPU mining, sellers of video cards really got rich. It soon became known that AMD's standard GPUs in mining tasks showed greater performance (GH / s for $.) Than NVidia products. Therefore, they were the first to disappear from the market, causing episodic periods of shortage. Interestingly, NVidia was also quite difficult to find during this period, although their performance was lower.
Already in the era of ASIC miners, the shortage of video cards in Russia was repeated several times and took on truly apocalyptic forms. So in 2017, Russian miners bought up 3 million video cards. Widespread comments of gamers from the cycle:
“I still consider myself lucky. I bought 1080ti for 49k wooden 2 months before the invasion of the miners. Now the same vidyuha costs 60% more.By 2012, the Russian press woke up. Suddenly, they began to write a lot about bitcoin, cryptocurrencies and mining, and even sometimes report on TV. However, judging by the publications of that period, it can be said that mining was perceived as something obscure and mysterious (Forbes naming worked well with the prefix “crypto”), but very few admitted that this activity could bring a fortune in the future.
Ps buy from German sites, the prices are the lowest there. ”
Raven of Suffer - February 27, 2018 at 22:03 # 28 (author's spelling preserved)
IT publications, for example, hacker.ru and the blogosphere have shown interest in mining up to this point. However, this was not systemic. The first articles about crypt on the habr, at least currently available, appeared in 2011. Somewhat later, tjournal.ru users began to actively write about this.
Already mentioned by hacker.ru, for example, in 2011, he managed to hastily bury Bitcoin. The article, as far as I know, did not have the effect of an exploding bomb, because everyone who needed to know about hacking before it. At the same time, it is likely that the publication has discouraged the desire to engage in mining for many, as well as in general to communicate with cryptocurrencies.
The Russian government began to somehow noticeably respond to cryptocurrencies only two years later, at the end of the three-year era of “bedside” GPU mining. So, on January 27, 2014, the Bank of Russia press service issued a newsletter “On the use of“ virtual currencies ”, in particular, Bitcoin when making transactions, in which the regulator recalled that:
“According to article 27 of the Federal Law“ On the Central Bank of the Russian Federation (Bank of Russia), ”the issue of monetary surrogates in the Russian Federation is prohibited.”
It did not directly indicate that mining is the issue of monetary surrogates, but it was hinted at extremely opaque. The style of the message and the position regarding cryptocurrencies suggest that the author of the text was Nabiullina. It will subsequently become the most systemic and ardent opponent of mining and cryptocurrencies in Russia.
FPGA - the king of one day and the trend of miniaturization
Even at the dawn of GPU mining, many began to criticize video cards for irresponsible power consumption, the need for constant monitoring, additional costs and tedious maintenance. An obvious solution to the problem was the use of FPGA chips, whose energy efficiency exceeded both the CPU and GPU.
They were conveniently combined into a single computer system and connected in parallel on one board. The power and cooling requirements of these microchips were incomparably lower than those for the GPU. In addition, the compactness and stability of the device was a huge plus. The gain in energy consumption at the time of its appearance was thousands of percent.
Despite all the advantages of FPGA miners, in Russia they remained almost unclaimed, as well as in many other countries. The harsh domestic miner preferred the good old, proven GPU farms, with all the associated hemorrhoids.
Only a few became the proud owners of the Swedish KnC Mars with a capacity of 6 Gh / s, which appeared in September 2012. Devices from the Americans from Butterfly Labs: BitForce SHA256 Single with a hash rate of 832 Mh / s and Mini Rig with a hash rate of 25 Gh / s, generally went almost unnoticed in Russia.
The main reason, of course, is the cost and power, which many at that time seemed excessive. So Mars cost $ 6,000, and Mini Rig, for example, sold for $ 15,000. Behind these figures, no one wanted to see any prospect and think about the fact that the 20 watts per 1 Gh / s that these miners consumed was 20-30 times less than a farm with a similar performance. According to bits.media, users who started working with FPGA before 2013 were able to get, if not superprofits, then very impressive incomes.
The rapidly growing complexity of the blocks made FPGA miners ineffective. So, devices that did not catch hype have sunk into oblivion, not having time to show what they are capable of. By 2014 - 2015 they were almost completely replaced by ASIC devices, about which a little later.
There is also information about the effectiveness of FPGAs for mining young cryptocurrencies. In the photo, the FPGA miner of 2019.
Deny cannot be allowed
As mentioned above in 2014, the Bank of Russia began to notice cryptocurrencies and react to them with rapid development and popularity with all kinds of statements. We can say that from this begins the reaction of the Russian authorities to the phenomenon. It began with the 2014 message mentioned, where cryptocurrencies were equated with money surrogates and wrote that "operations with" virtual currencies "are speculative." Also in 2014, the first deputy. Bank of Russia Chairman Georgy Luntovsky said that they are monitoring the Bitcoin system, and legislative regulation is planned.
George Luntovsky
The next stone flew into the gardens of crypto farmers in March 2015, when the deputy. Finance Minister Alexei Moiseev said that for the production and use of money substitutes in Russia will be punished. He ranked “virtual currencies” as a money surrogate (the term has long been used by the Russian establishment instead of the word “cryptocurrencies”), including bitcoins.
Alexey Moiseev
Also in 2015, for the first time, Vladimir Putin spoke about cryptocurrencies, who, speaking on the forum of IT specialists “Territory of Senses on Klyazma”, noted that there are “fundamental problems with the widespread use of cryptocurrencies today.” The President of Russia also noted that he learned about such problems from the head of the Bank of Russia Elvira Nabiullina.
On October 26, 2015, Izvestia received a message stating that the Russian Ministry of Finance wants to impose a penalty for the issue and circulation of cryptocurrencies, primarily bitcoins. The violators of the ban on mining wanted to be imprisoned for 4 years. The intentions of the Ministry of Finance have not yet become a reality.
A unique case occurred in 2017 in the Kostroma region. A criminal case was opened there for illegal banking activities (part 2 of Article 172 of the Criminal Code of the Russian Federation) in respect of 3 people. The suspects are blamed for the fact that they exchanged bitcoins for an amount exceeding 500 million rubles.
The indecisive and cautious position of the authorities is largely due to the position of the public. So, according to the results of the NAFI’s all-Russian study of public opinion, in 2016, only 20% of Russians were positive about the cryptocurrency ban. In 2017, the share of the population negatively inclined towards the “crypt” was below 10%.
In addition to loud criticism and criminal prosecution, there were crypto business advocates from various branches of the Russian government. For example, Art. scientific al. The Monetary Policy Center of the Institute of Physics and Technology at the Financial University under the Government of the Russian Federation, Ph.D., Valery Lopatin publicly defended cryptocurrencies, saying that the Bitcoin ban would close the path for creating and using domestic sidechain systems. And in this way many useful innovative projects will be buried.
Valery Lopatin
A deputy from the LDPR faction, Andrei Lugovoi, spoke in defense of cryptocurrencies and miners, who told his news agency “Moscow” that he was against a complete ban on cryptocurrencies in Russia. Also in defense of cryptocurrencies in Russia, Chairman of the Board of Sberbank of Russia, former Minister of Economics and Trade of Russia, German Gref, repeatedly spoke out.
Herman Gref
Over the past 4 years, the State Duma has repeatedly created working groups whose tasks included solving the issue of regulating cryptocurrencies. Judging by the news of 2019, lawmakers still want to ban mining and operations with crypto assets in Russia.
Despite the adoption of a number of documents, cryptocurrency in Russia remains in the “forbid cannot be allowed” position, due to the inability to effectively implement measures to control and regulate emissions (mining itself) on the one hand and operations on the other. Those. It’s foolish to introduce a ban that cannot be put into practice.
His Majesty ASIC and the era of industrial mining in Russia
ASIC (Application Specific Integrated Cirquit) are chips designed to perform only one specific task. In this regard, they cope with it better than the rest. It is these devices that are widely used in mining devices today and they were able to almost completely replace GPU farms.
The problem of ASIC chips was expected to be difficulties in self-production, testing and commissioning. A long and laborious process makes the chips quite expensive. The beginning of the development of the first ASIC chips in the world dates back to 2012. Around the same time, pre-orders for the first ASIC miners appeared.
We can say that it is with ASIC in Russia, and in the world, that the era of industrial mining begins. Not so right away, but ASIC hype is beginning to overwhelm Russian crypto enthusiasts by mid-2015. And the rapid growth of the main cryptocurrency in the world in 2017 turns just a hype into a form of insanity on cryptocurrencies, and in particular on ASIC mining.
One of the cents of insanity is Irkutsk, where, due to the uniquely low industrial cost of electricity, almost half of the country's miners settle. The Irkutsk cluster has its drawbacks, such as the remoteness from the European part of Russia, the non-velvety climate, and in some places the electricity supply to industrial facilities is not very stable due to the worn-out cable economy.
However, such trifles scare a few and newly minted crypto miners go to Irkutsk as a klondike. Many people sometimes sell businesses, cars, and even apartments, acquiring the coveted ASIC devices in pursuit of a long bitcoin. One of the media miners of Irkutsk during the crypto fever of 2017 was Yuri Dromashko. Who sold almost everything and additionally took a loan to build a farm of 50 ASICs.
Yuri Dromashko
In 2018, the idea arose to create and maintain Russian mining pools in order to keep the crypt inside the country. The initiators were the Russian Association of Cryptocurrencies and Blockchain (RACIB) and its member organizations. Currently, the association is actively working on the creation of national pools.
Another impressive experience is the story of the creation of one of the first Russian
mining operators - BitCluster. The company is known for creating a network of mining hotels located in the northern regions of Russia, in Angarsk, Bratsk. By the way, it is in Bratsk that there is one of the largest cryptocurrency mining sites, designed for 120 MW. Today, the company hosts more than 8000 devices and according to my data, this is one of the few companies that successfully survived the “cryptozyme”.
The founders of the project were crypto-businessmen Dmitry Kikin, Vitaliy
Borschenko and Sergey Arestov. All three were successful in projects that did not relate to cryptocurrencies. Despite this, they well understood where the wind was blowing and for the 2016-2017th year they created their own mining and infrastructure project. Today, this company is actively promoting the idea of ​​the Russian crypto valley.
In conclusion
It is not known how realistic the ideas for creating large national pools and crypto-values ​​are realistic, but mining in Russia is livelier than all alive, contrary to the forecasts of cryptosceptics who once again buried it after the collapse of 2018. What happens next with mining in Russia is not known, while many large financiers and investors continue to believe in the global prospects of decentralized emissions and monetary mechanics based on constant deflation. In my deep conviction, no one has yet created or proposed a more progressive monetary system.
Existing processes demonstrate the ambiguous attitude of the authorities and the lack of effective legalization mechanisms. The phrase “Deny cannot be allowed” is more relevant than ever. Legislative initiatives regularly arise and fail when faced with the harsh reality of centralized emission and anonymity of cryptocurrencies.
Perhaps I missed some significant phenomena that existed in the Russian mining in an attempt to reduce this small post. I would be grateful if readers can help fill these gaps in the comments.
Photo content used:
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Source: https://habr.com/ru/post/460939/
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