Ukraine-Russia tensions: What effect have they had on BTC miners?

  • Despite the escalating tensions between Russia and its neighbor Ukraine, miners haven’t been affected and the hashrate generated in Russia has remained constant.
  • One mining pool has however cut off Russian miners in protest at President Putin’s action, saying that Russian miners are supporting the nation’s actions.

The Ukraine-Russia conflict has been at the center of global media coverage for weeks now, even as Russia encroaches on the city of Kyiv. The effect that the conflict has had on crypto prices has also been widely covered, with Bitcoin’s safe-haven asset narrative coming under question. But what about the miners? With Russia being the world’s third-largest mining hub, the industry is coming into focus as the tensions escalate.

Russia accounts for about 11 percent of the global BTC hashrate, data from the Cambridge Centre for Alternative Finance shows. And despite the tensions, Russian miners haven’t been adversely affected. Data shows that the hashrate that the country contributes has remained constant over the past two weeks even when President Vladimir Putin invaded Ukraine.

It’s critical for Russian miners to stay online. Whenever the BTC hashrate dips suddenly, the network becomes that much less secure and becomes prone to attacks. So far, Bitcoin has never been attacked, but this is not to say that it’s impenetrable. There are other major blockchain networks that have fallen victim to 51 percent attacks, including Ethereum Classic.

Any escalation of the conflict between Russia and Ukraine could also adversely affect another neighbor – Kazakhstan. The country, which borders Russia to the north, is the world’s second-largest mining hub after the U.S. If the conflict were to affect both Russia and Kazakhstan, the BTC network would be at great risk.

Already, we have seen disruptions to the miners in Kazakhstan. Earlier this year, deadly protests in the country over a hike in fuel prices led to the death of over 160 people. It also led to a five-day Internet outage which effectively knocked out BTC miners in the country. This led to a dip in the global BTC hashrate.

While the miners have yet to be directly affected by the conflict, they are starting to feel the heat, with one of the biggest Ethereum mining pools cutting off Russian miners.

In its statement on Reddit, FlexPool revealed that it was taking a stand against Russia. Claiming that it always tries to stay away from taking political stands, the pool noted that “this is greater than politics, greater than anyone.”

FlexPool, which accounts for 5 percent of the Ethereum hashrate and is the fourth-largest ETH mining pool, added:

We apologize to our Russian miners; many of you do not support the war. However, it is you who are supporting your nation. Without the people, Russia cannot operate. It is only through reducing the economic power of its people that we have a chance of affecting this war.