Russian officials consider proposal to mine Bitcoin with associated gas

Russian officials consider proposal to mine Bitcoin with associated gas


The Russian government is considering a new project to mine Bitcoin (BTC) with associated petroleum gas.

Vasiliy Shpak, deputy minister of Industry and Trade of Russia, has reportedly filed a proposal with the Russian central bank and the Ministry of Digital Development to use the country’s oil field equipment for mining cryptocurrency.

According to a report by Kommersant, the proposal was filed on Sept. 7, asking the government to provide its feedback on an initiative originally coming from local oil and gas companies.

The firms specifically proposed to use associated gas to power nearby data centers for mining Bitcoin. This type of natural gas, called associated gas, is a byproduct of oil drilling, but due to the incredible cost of proper gas infrastructure, it is often wasted through flaring, wherein the excess gas is simply burned off.

The Russian government has attempted to reduce gas flaring in order to cut emissions but has struggled to meet targets due to a lack of necessary infrastructure.

Using the gas for Bitcoin mining could potentially improve the efficiency of natural gas usage in thermal generation through “hybrid modules of digital currency extraction,” Shpak reportedly noted in the letter.

According to Kommersant, the project involves “one of Russia’s largest oil companies” that is struggling to scale its cryptocurrency mining project due to regulatory uncertainty.

Related: Too early to talk about using crypto for oil trading, says Putin

Gazprom Neft, the third-largest oil producer in Russia, is reportedly the only company that has been involved in such a project, generating 1.8 BTC in just one month last year. The firm is mostly owned by the Russian government through the Federal Agency for State Property Management and Rosneftegaz.

Gazprom Neft did not immediately respond to Cointelegraph’s request for comment.

Bitcoin mining has been billed by entrepreneurs and politicians alike as a way to address the wasteful practice of flaring associated gas. Last week, United States Senator Ted Cruz recently said that there is an “enormous opportunity for Bitcoin […] to capture that gas instead of wasting it.”


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *