Necessity is the mother of invention, and I think that’s completely awesome, too, because desperation really does bring out the innovation. Sometimes, though, that innovation is very bad. Screening empty cities across Russia. One mobile crypto mining farm had hidden its setup inside a truck, authorities found, and was tapping electricity directly from the grid to power its operations. Mining rigs on divider wall width shared back of a lorry in Siberia with a cell transformer. They’re not just stealing power hand over fist; they’ve stolen enough to power an entire small village! It sure is cool…until you think about what might happen.

This ingenious (and illegal) operation was happening in Buryatia, a region with a seasonal ban on crypto mining. See the connection?

Bans Create Black Markets, Period.

We have witnessed this unfold again and again throughout our country’s history. Prohibition did not put an end to drinking. It merely given organized crime a lucrative industry. We know that the war on drugs has not eliminated narcotics but rather contributed to the growth of cartels and violence. So why do we continue to deceive ourselves into thinking that banning things makes them go away?

Buryatia's seasonal mining ban, intended to alleviate strain on the power grid, simply pushed the activity underground – literally, in this case, into the back of a truck. You can't legislate away demand. Instead, you develop a breeding ground for the illicit activity. This creates the playground for those who are lawless enough to want to go rogue. Those fleeing suspects in the SUV? They are the unintended consequences of a policy that largely ignored commonsense economic principles.

Mining is extremely profitable, or else people wouldn’t be illegally mining enough electricity to light up small towns to do it. All a ban does is increase the potential profit margin for anyone crazy enough to accept the added risk. It's Economics 101, folks.

The Grid Needs Upgrades, Not Bans.

The issue isn’t necessarily crypto mining — it’s that states don’t have the infrastructure to accommodate it. Instead of resorting to knee-jerk bans, governments should be investing in modernizing their power grids and creating regulatory frameworks that allow crypto mining to operate responsibly.

A ban is a lazy solution. It’s analogous to treating a broken leg with a band-aid. It fixes the symptom (grid strain) without treating the underlying ailment (outdated infrastructure).

These are not radical ideas. All of these solutions are realistic, pragmatic, and based in common sense. They understand the consequences of the crypto mining influx and are looking to fold it into our current energy network in a responsible way.

  • Taxation: Levying taxes on crypto mining operations to generate revenue that can be reinvested in grid upgrades.
  • Incentives: Offering incentives for miners to use renewable energy sources.
  • Grid Modernization: Investing in smart grids that can better manage energy demand and distribution.

The piece goes on to describe recent cases of illegal mining in other countries. Kuwait spooked at huge subsidy costs and halved domestic electricity consumption after a crackdown. Sweden shut down 18 data centers. Even a Massachusetts high school jumped on the bandwagon. It’s looking like the case for bans, isn’t it?

What About Kuwait, Sweden, and Massachusetts?

Wrong. They shed light on the far-reaching global nature of the problem, as well as the uselessness in trying to tackle the matter with local bans. Crypto miners are going to overwhelmingly show up wherever regulations are more favorable. In cases such as the Buryatia truck, they’ll go so far as to step outside the law.

The answer is not to go around playing whack-a-mole with illicit mining sites. It’s to establish a level playing field where the same clear rules and regulations apply in the same way across all borders. It’s to collaborate with the crypto industry, not compete with it. It’s not about punishing miners, it’s about an industry where miners are incentivized to work legally and responsibly—not driven underground.

It’s time to stop giving special treatment to crypto mining. Rather, let’s treat it for what it is — an incredibly growing, legitimate industry that can help drive economic development and prosperity. Bans aren’t the answer, they just shift the problem and cause more harm. The situation with that truck in Buryatia is a tragic reminder of that point. It’s high time for a better, more sophisticated way.

We need to stop treating crypto mining like a pariah and start recognizing it as a legitimate industry with the potential to contribute to economic growth. Bans don't solve problems; they just create new ones. The truck in Buryatia is a stark reminder of that. It's time for a smarter, more nuanced approach.