"The place is ideal for mining cryptocurrencies: it is cold here and there is electricity in this area that is not connected to any of Russia's power grids."
The Siberian city of Norilsk is known primarily as the capital of the mining giant PJSC MMC Norilsk Nickel. It is one of the largest settlements in the Arctic Circle with a population of 180,000 and can only be reached by plane or boat. However, the city may soon become famous for another type of mining - now it houses the first crypto farm for the production of new bitcoins in the Arctic - BitCluster. The Russian owner of the facility is already planning expansion after starting work late last year.
A bitcoin sculpture made from scrap metal is installed on the BitCluster mining farm. Bitcoin mining is the process by which transactions are confirmed on the blockchain, with miners receiving a reward of 6.25 bitcoins for each block mined. The capacity of the data center has already been contracted, it will serve customers from all over the world, including Switzerland, the United States and Japan, said BitCluster co-founder Vitaly Borshchenko in an interview.
In Norilsk, temperatures drop to -40 degrees Celsius, making it one of the coldest places on the planet. The city is so remote that locals refer to the rest of Russia as "the mainland." Temperature is a big part of the attraction for Bitcoin mining, as the two biggest running costs for the process are cooling and electricity.
BitCluster opened a new data center near the former nickel plant of the Stalin era, which was closed by Norilsk Nickel in 2016. The presence of Norilsk Nickel in this area is a big component of its attractiveness, because its power unit will provide the company with cheap electricity.
Four old containers for transporting fruits and juices have been repurposed to accommodate cryptomining rigs and can accommodate up to 360 miners like Antminer S19. There are nine containers of various sizes on the farm.
The polar night in Norilsk lasts about 45 days, starting from the end of November. The city does not receive sunlight during these months.
Norilsk Nickel office. The miner has its own digital project: it started selling metal in the form of crypto-tokens in December. According to Borshchenko, although Norilsk Nickel has nothing to do with the data center, its power supply provides electricity to crypto mining. BitCluster will become the second largest consumer of electricity in the city after Norilsk Nickel itself.
Even with an average annual temperature of -10 degrees Celsius, the BitCluster facility still needs ventilation and air circulation to cool the machines.
BitCluster customers pay just RUB 2.75 (USD 0.04) per kilowatt hour, which is one of the cheapest rates in the world. The Norilsk Nickel power unit primarily uses gas or hydropower to generate electricity.
