As the bitcoin craze continues to unfold, a member of the Russian parliament wants to build a new city in Siberia to take advantage of cheap energy costs there in order to "mine" it and other cryptocurrencies.
Bitcoin mining is the computationally complex process of verifying transactions and adding them to the public ledger, known as the block chain. Running the computers for high-volume mining requires vast amounts of electricity.
By one estimate, each bitcoin transfer uses enough energy to run a comfortable American house for nearly a week, Motherboard reported, and there are currently about 300,000 transactions per day.
The idea, put forward by Duma member Boris Chernyshov, is to take advantage of the region’s abundant low cost energy to make it economical to run the banks of servers required to do the enormous amount of calculation required to do make new bitcoins and other digital means of exchange.
Chernyshov said the city would be built next to a large hydroelectric power station.
The idea is now being considered by Denis Manturov, minister of industry, and Nikolai Nikiforov, minister of communications.Â
The city of Irkutsk in eastern Siberia has already become a centre for the mining of cryptocurrencies, based on the fact that energy costs are only around 20% of their level in Moscow.
There is even a plan to heat the city’s apartments with waste heat from cryptocurrency miners, and the city will soon have a bitcoin ATM.Â
Chernyshov said: "If we build such a settlement near the border, for example, with China, this will immediately cause great interest, there will be flows of business tourists. Such a place will become a business hub, bringing investment from abroad. This is a driver, a point of growth."
Dmitry Marinichev, Russia’s internet ombudsman, supported the idea of building the bitcoin city, as long as it the mining companies were privately owned.Â
He told Russia Today: "The state has nothing to do with business, the state must formulate the rules of the game. Any business should have a beneficiary, one who is vitally interested in the enterprise. Otherwise, all this is doomed to failure."
Photograph: Irkutsk, a mining town, but not as we know it (Creative Commons)