Page 18 - bne_Tech_06_2018

Blockchain & Cryptocurrency
June 2018 www.intellinews.com I Page 18
Russian, Chinese investors contemplate cryptocoin mining in Transnistria
IntelliNews Pro
Chinese investors visited the Moldovan separatist republic of Transnistria in May to evaluate plans for developing mining farms related to blockchain technology, deschide.md reported. Russian inves- tors announced similar plans last September.
Such businesses would have major political implications, providing the separatists with resources at a time when the central authorities in Chisinau helped by Ukraine are isolating the rebel unrecognised territory.
Cryptocurrency mining is a validation of transac- tions by adding transaction records to Bitcoin's public ledger of past transactions or blockchain, rewarded in cryptocurrency. It might be profitable in Transnistria due to the “very low” electricity price in the region, deschide.md commented. The technology is energy-intensive, and Transnistria inherited most of Moldova’s electricity generation capacities developed during the Soviet period.
The central Moldovan authorities have used their electricity purchases as a means to pressure
the separatists (by threatening to import all their electricity from Ukraine, last year), but Chisinau’s room for manoeuvre is limited since the country has few alternative options to Transnistria’s elec- tricity at this moment (better interconnections with Romania in the future might fundamentally change the situation). Diverting its electricity to cryptomin- ing and refusing to export it to Moldova would pose
significant problems for the central government in Chisinau — yet this is still a remote scenario.
But the notion of electricity price in Moldova’s separatist region is much more complex and cryp- tocoin mining would significantly boost separatists’ finances, magnify the indirect aid supplied by Rus- sia (through natural gas deliveries used for elec- tricity generation but never paid for) and therefore need political endorsement from Moscow.
Indeed, the Russian investor considering Transnis- tria for cryptocoin mining is Igor Ceaika, the son of Russian federation’s head prosecutor according to deschide.md. The head prosecutor is a close of Mol- dova’s pro-Russian President Igor Dodon as well.
It is unclear who the Chinese investors announced by deschide.md are, but the Transnistrian authori- ties have expressed willingness to cooperate with them. The separatists’ Prime Minister Igor Mar- tinov stated that the Chinese delegation included members of “important companies on the mining market”. However, as of February 2018, the Chi- nese government halted trading of virtual cur- rency, banned initial coin offerings and shut down mining, forcing Chinese mining farms to locate abroad. Conversely and understandably given its energy resources, Russia encourages mining. In October 2018 Russia will become home to one of the largest legal mining operations in the world, located in Siberia.