Ongoing cryptocurrency mining is threatening the already precarious power supply in the tiny, unrecognized republic of Abkhazia, prompting officials to call for measures to regulate the cryptocurrency sector to prevent power outages this winter.
Abkhazia has recently become a cryptocurrency enthusiast, just like Georgia, the country from which it was separated.
“Cryptocurrency mining operations are carried out on so-called mining farms, created in abandoned or partially abandoned areas Soviet factories abandoned during the period of quasi-independence of the territory."said Aslan Basaria, head of the state energy company Chernomorenergo.
Computers that mine cryptocurrency absorb huge amounts of electricity. This places additional stress on the network, power lines and substations, which are already loaded to their full capacity. If temperatures drop, there is a risk that electricity will not reach regular consumers.
The civil war, the exodus of the pre-war population and the subsequent international isolation have turned Abkhazia into a shell of what used to be the Soviet Union's main pastime. Russia, backed by a handful of countries geopolitically indebted to Moscow, recognizes Abkhazia as independent of Georgia. To the rest of the world, Abkhazia remains de jure part of Georgia, which is ruled by an unrecognized separatist regime.
But what both Abkhazia and Georgia share is a passion for cryptocurrency, as well as a large hydroelectric power complex that crosses the de facto border and provides the main fuel for cryptocurrency - electricity. The complex cannot meet the electricity needs of both sides in winter, when water levels in the giant Jvari reservoir are low and electricity consumption is high.
Thanks in no small part to low electricity prices, Georgia is a promised land for miners, ranking second in the world in cryptocurrency mining in terms of energy consumed, second only to China. In Abkhazia, electricity is even cheaper. Households pay about 0.6 cents per kilowatt. In addition, Abkhaz officials say that electricity theft remains a serious problem and that 30 to 40 percent of consumers pay no electricity bills at all.
The already shaky power system is now being plagued by mining operations.. But on the other hand, cryptocurrency offers a remote region the opportunity to connect to an international network of money production. By being free from government regulation, cryptocurrency helps territories such as Abkhazia and the Donetsk People's Republic, a breakaway part of Ukraine, bypass international restrictions and attract investment.
Currently, efforts are even being made to create a digital cryptocurrency of Abkhazia “Coin of the Republic of Abkhazia”.
One of the startups presented the idea of a coin at a blockchain conference in Moscow last year. Evgeny Galiakhmetov, head of blockchain company BCSG, said at the conference that cryptocurrency could completely transform Abkhazia and usher in a future of economic prosperity and vibrant international trade.
How Abkhazia plans to reconcile its big cryptocurrency plans with the problem of electricity shortages remains unclear. Regarding energy supply, regulatory measures are needed to control mining farms and not leave Abkhazia without electricity.
According to eurasianet.org
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