As many people do when discussing the complex world of cryptocurrencies, Vladimir Putin kept it simple: “Of course, we also have certain competitive advantages here, especially in the so-called mining.” After events this weekend, when Russia was hit by severe financial sanctions, the Russian president might be considering capitalising on those advantages.
Putin was speaking in January, days after the country’s central bank proposed a blanket ban on cryptocurrency trading and mining. In the case of bitcoin, the cornerstone cryptocurrency, mining is the energy-intensive process by which computers verify new bitcoin transactions – putting them on a virtual ledger known as a blockchain – and generate new bitcoins as a reward for that work.