Russian bitcoin (BTC) miners are reportedly operating as usual despite Ukraine invasion this week.
According to estimates from the Cambridge Bitcoin Electricity Consumption Index, miners from Russia accounted for around 11.2% of the global BTC hash rate as of August 2021. With sanctions on the Russian government coming from the United States and NATO allied nations, it is unclear how the sector will be affected local BTC and the market in general.
While some cryptocurrency mining companies, such as Ethereum-focused Flexpool, have stopped their services in Russia in response to the invasion, BTC Compass Mining miners have confirmed to their clients staying in Russia that their mining infrastructure will remain operational in the region.
The CEO of Compass MiningWhit Gibbs expressed his thoughts and prayers to all those affected by the conflict on Twitter earlier today, while assured the community that its facilities in Eastern Europe are safely located in Serbia, well away from any “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
I want to assure our clients staying in Russia that we are in constant communication with the facilities, which are in Siberia and well insulated from any geopolitical disturbances. Compass has confirmed with our partners that all miners are safe and will continue to function as normal.
The Biden administration said Thursday that it would impose “broad financial sanctions and strict export controls” on Russia’s major financial institutions, government, high-ranking officials and technology sector..
In particular, it appears that the heavy restrictions will not yet extend to the SWIFT international payment network and cryptocurrency transfers. Many observers have claimed that this could be a time when the Russian cryptocurrency sector flourishes, as it could soon become an important tool for circumventing various sanctions.
In a newsletter to investors earlier today, 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 back a decentralized currency with global appeal:
“This game theory brings us to Bitcoin. The next best thing to being the producer and distributor of the global reserve currency is to be the most advanced user and holder of a global reserve currency that no country controls.”
“That incentive leads these superpowers to realize that bitcoin will be essential for decades to come. Countries that have a large share, along with doing mining and other pro-bitcoin activities within their country, will have a significant advantage,” he added..
VanEck’s head of digital asset research, Matthew Sigel, echoed similar sentiments to Bloomberg, noting that the Bitcoin network will allow Russia to reduce the potential damage caused by being excluded from the Western financial system:
“Neither dictators nor human rights activists will encounter any censorship on the Bitcoin network.”
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