Siberian entrepreneurs mine bitcoins to heat private house

IRKUTSK, RUSSIA (REUTERS) – Cheap energy prices and a long winter season could make the Russian Siberian town of Irkutsk an ideal spot for eco-friendly bitcoin mining.

Two local entrepreneurs are now waiting for minus temperatures so that they can test out their first wooden cottage completely heated by a small bitcoin mining farm.

Large Siberian hydro-electric power stations create an energy surplus in the Irkutsk region, allowing providers to keep prices at a rate several times lower than in the European part of the country.

Ilya Frolov and Dmitry Tolmachyov say their two miners generate around $430 of monthly income by processing bitcoin transactions and can also keep about 20 square metres of space warm.

Mining hardware is known to produce a lot of heat and those who mine crypto-currencies have to find cooling solutions.

But Frolov says in Siberia, where outdoor temperatures are low for at least nine months a year, it is not a cooling system which is needed, but rather a way to convert the processing units into part of a home heating system.

According to Frolov, one bitcoin mining unit with a power level of one kilowatt can heat about 10 square metres of living space.

Tolmachyov, whose company designs and produces wooden cottages, says any Siberian family can have a home heated by mining farms. He believes it could not only increase a family’s income, but would also be energy-efficient.

Bitcoin, the most popular crypto-currency today, is controlled not by a state but by an underlying algorithm by which participants can “mine” bitcoins through solving mathematical problems. The universe of miners can then validate “blockchains” of bitcoin transactions by majority vote, weighted by their mining effort. As a reward, miners receive more bitcoins, distributed randomly.

Russian President Vladimir Putin said earlier crypto-currencies were risky and used for crime. He also said they could be used to launder money, evade taxes and finance terrorism and their usage should be better controlled by the state.