As an analyst with over two decades of experience in the tech and finance sectors, I find Russia’s Bitcoin mining and AI computing facilities plan for BRICS nations to be a strategic move that is likely to spark a wave of similar initiatives across the globe. My life experiences have taught me that when one major player makes such a bold step, others are quick to follow suit, especially in the rapidly evolving digital currency space.
An industry expert comments that Russia’s proposal to establish Bitcoin mining and artificial intelligence data centers across BRICS countries might motivate additional nations to leverage their government-owned assets for Bitcoin mining, implying a potential trend in the global cryptocurrency market.
Nico Smid, founder of Digital Mining Solutions, stated to CryptoMoon that the application of game theory is currently being set into action. He elaborated that additional nations are expected to emulate countries such as El Salvador, Bhutan, Ethiopia, the United Arab Emirates, and Russia, by leveraging excess energy for Bitcoin (BTC) mining.
Around mid-October, during the BRICS Business Forum held in Moscow, Russia’s state investment fund teamed up with a local data center operator named BitRiver to build Bitcoin mining and Artificial Intelligence (AI) processing centers aimed at BRICS countries.
The project might lead to the BRICS countries adopting Bitcoin for international trade, instead of the initial proposals that involved a collection of local currencies or gold-backed currencies.
The BRICS consists of five significant developing countries, originally made up of Brazil, Russia, India, China, and South Africa. By 2024, it had grown to include Egypt, Iran, Saudi Arabia, Argentina, and Ethiopia, as well as the United Arab Emirates.
As a researcher, I am discovering that the economy I’m studying currently surpasses the combined Gross Domestic Product (GDP) of the G7, an economic bloc spearheaded by the United States, Japan, and Germany.
Matthews Sigel, head of digital assets at VanEck, mentioned to CNBC on October 28 that the news item mostly slipped past notice, as the cryptocurrency sector seems particularly worked up about the approaching U.S. election.
Russia’s national wealth fund is planning to invest in Bitcoin mining facilities across BRICS countries, with a vision to facilitate international trade using Bitcoin. This was shared by the Head of Digital Assets at VanEck, Matthew Sigel, during an interview on Squawk CNBC.
— Business Blurb™ (@businessblurbb) October 28, 2024
In the CNBC interview, Sigel emphasized that there’s a great sense of urgency worldwide to discover an alternative to the reckless financial management practices that the U.S. has been adopting.
Three countries from the BRICS grouping – Argentina, Ethiopia, and the United Arab Emirates – are currently using their government-owned assets to mine Bitcoin.
According to Alen Makhmetov, the co-founder of Hashlabs Mining, Russia’s initiatives in Bitcoin mining and Artificial Intelligence might be an effort to secure a strategic advantage on the global stage.
In areas with minimal IT infrastructure, Russia views an opportunity to broaden its impact, as Makhmetov stated.
“This aligns with its broader foreign policy of strengthening ties within BRICS as US support for these nations wanes.”
JUST IN: BRICS to use digital currencies for investment developments.
— BRICS News (@BRICSinfo) October 18, 2024
The BRICS strategy proposed by Russia could potentially benefit Bitcoin, given that a substantial part of the Bitcoin mining process (hashrate) is presently controlled in the U.S., according to Smid’s statement.
“It creates opportunities for older mining equipment to remain productive in regions with lower energy costs, where mining at the current location might otherwise be unprofitable.”
It comes as Russia is set to lift its Bitcoin mining ban on Nov. 1 — but not without constraints.
Russia now requires all Bitcoin miners to register with their Federal Tax Service and provide details about their machine models and digital wallet addresses, according to Makhmetov. Additionally, Makhmetov suggests that the process of lifting the Bitcoin mining ban may not be straightforward due to increasing electricity costs and a weakening ruble in Russia.
“Russia is no longer a country with abundant, low-cost hydropower—electricity is becoming expensive due to a combination of excessive demand and the ruble devaluation.”
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2024-10-31 09:03