A popular holiday destination in Georgia is facing its worst energy crisis in years, and the authorities are blaming Bitcoin mining in Abkhazia. According to a report by the official press service, the Abkhaz State Security Service (SSS), the police are actively hunting down private crypto miners and have already seized over 200 mining rigs from different parts of the republic. Reporting to the acting Prime Minister Valery Bganba, the SSS chief Dmitry Kuchuberia, the police unearthed “discovered and seized 194 units of mining equipment between December 10 and 13.”
Police Raid Have Done Little to Resolve the Crisis
Local media outlets stated that the police were keen on stopping Bitcoin mining in Abkhazia and raided homes in the Gagra and Gudauta regions, as well as Sukhum and Omchamira. The law enforcement explained that they seized over ten crypto mining rigs, five of which were found in a residential building in Agidzera and five others in Voronovo Street, all belonging to private citizens. However, despite all the efforts, the police raids seem to have done little to diminish the Abkhazia energy crisis, as the head of the state’s energy producer said the energy supply was still critically low.
Media reports that the Abkhazia energy crisis, mainly due to critically low water levels at the local Inguri hydropower plant, has been worsened by the state’s lack of funds to purchase extra electricity from Russia. According to some reports, the available daytime electricity amounts to only about four hours and 40 minutes daily, while the nighttime supply is sustained by the small amount the state purchases from Russia, which lasts only two to three days a week.
Bitcoin Mining in Abkhazia is Said to Consume 50% of Electricity.
Authorities have indicated that their last purchases exhausted the remaining budget for the region. As per local estimates and now the authorities, Bitcoin mining in Abkhazia is entirely to blame for the current energy crisis, as illegal miners consume up to 50% of the region’s electricity supply. As the local population protests the lack of sufficient electricity supply, the head of the state’s electricity supplier, Chernomorenergo, says that without decisive action, illegal Bitcoin mining in Abkhazia will plunge the entire state into a state of darkness.
Bitcoin mining in Abkhazia generates new Bitcoins, encompassing a global network of computers struggling to solve complex mathematical algorithms. The mining equipment used for the exercise consumes a large amount of electricity, which environmental experts blame for the potential to derail efforts for combating global warming. The highly lucrative but competitive mining process is now under the radar of the local police department in the “playground of the Soviet elite” that broke away after the collapse of the Soviet Union in the early 1990s.
The Government has tried to rein in Mining Since 2018
Advertisement Banner
The region of Abkhazia, with its population of close to 240,000 people, is said to have hosted at least 625 crypto-mining farms set up within the last few years. It’s, therefore, not difficult to see why locals would quickly point an accusing finger at those conducting mining activities in Abkhazia, an activity that local families and those attempting small-scale operations cannot easily track. The Abkhaz government tried to rein in Bitcoin mining in Abkhazia in 2018. However, the efforts of the Government don’t seem to have had much effect as the importation of bitcoin mining hardware continues to rise since crypto mining remains legal in the state.
Conclusion
Bitcoin mining in Abkhazia hit an all-time high in 2016 and has rooted itself in that part of the former Soviet Union. While the territory declared its independence from Russia, which has been largely isolated and underdeveloped, it has attracted a host of cryptocurrency enthusiasts and some foreign investment relating to Bitcoin mining that has now become the ire of the local people. At the same time, cryptocurrencies, operating outside the traditionally recognized baking system, have become highly popular in Abkhazia, thanks to the extremely low energy prices. Only time will tell whether the new crackdown will solve the Abkhazia energy crisis.
Frequently Asked Questions
What is Bitcoin mining?
Bitcoin mining is the process of processing transactions and securing the Bitcoin network. The term mining is an analogy for gold mining, as it is also the process that creates new Bitcoins.
What is the Motivation behind Bitcoin mining?
Those who participate in Bitcoin mining earn a reward in terms of new coins for facilitating the secure payment network.
How does Bitcoin mining work?
Anyone who wants to become a miner needs software to run with specialized hardware. Mining equipment consumes a large amount of energy, which is why environmental activists in many countries complain.
The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. The Bit Journal does not guarantee the accuracy, completeness, or reliability of any information provided in the price predictions, and we will not be held liable for any losses incurred as a result of relying on this information.
Investing in cryptocurrencies carries risks, including the risk of significant losses. Always invest responsibly and within your means.
