Abkhazia: the crypto mining farm of Georgia
Abkhazia has been an important part of Georgia throughout history and is now also an important centre for crypto mining activities.
This region was plagued by conflicts in the 1990s that led Russia to illegally seize Abkhazia. Few countries recognise Abkhazia as a sovereign state and most UN member states proclaim it part of Georgia.
The theme of crypto mining in Abkhazia is very popular. There have been many mining farms in Abkhazia for a long time. In autumn 2017, the topic of introducing Bitcoin Trader its own crypto mining in the country was also actively discussed in Abkhazia.
The discussions were attended by pessimists and optimists. This is not surprising, as today it is difficult to assess these perspectives unequivocally. Some spoke of the advantages of state mining, others of the damaged electricity grid.
Abkhazia’s energy problems did not start yesterday
Every year the energy infrastructure of Abkhazia’s towns and villages deteriorates, leading to permanent accidents. The extremely low electricity costs do not encourage local businesses and residents to save money. At the same time, only half of consumers regularly pay for electricity.
Abkhazia is a disputed territory and almost everything is used for mining due to low electricity costs and virtually no taxes.
Compared to Georgia, the territory also has many mining operations that have integrated cryptos into the economy on a decent scale. Cryptos are becoming increasingly popular in Georgia and many industries are already adopting them as a payment method.
Online casinos have begun to consider incorporating cryptos as a payment method, but it is currently impossible to use Bitcoin to play slots in Georgian casinos.
The golden age and the ban on crypto mining farms in Abkhazia
Low electricity prices in Abkhazia and the lack of any control over the activities of the miners have attracted a considerable number of people in Abkhazia eager to get Bitcoin. Cryptocurrency fever has begun.
Russian citizens and their partners in Abkhazia have built mining farms all over the territory. There were enough such farms in the state facilities. Electricity consumption increased considerably, which immediately affected the state of the local electricity grids, where tensions decreased even more and accidents became almost daily. As a result, the authorities ran out of patience.
In November 2018, Raul Khajimba received a report from the general manager of the Black Sea Energy Company, Aslan Basaria, on the energy situation in Abkhazia, after which it was decided to suspend the mining farms.
At the end of December 2018, the resolution “On temporary measures to limit electricity consumption by certain categories of subscribers” was adopted and, at the beginning of January 2019, 15 mining farms were decommissioned in Abkhazia.
Outlook for crypto mining in Abkhazia for 2020
In general, mining is now officially prohibited in Abkhazia. At the beginning of 2019, the ban on mining farms would be long-term.
Abkhazia’s energy is in a difficult situation at the moment. In the summer of 2019, the Abkhazian Ministry of Economy prepared a bill to regulate mining activities, but then launched a tumultuous election campaign, and early in the year the opposition forced the newly elected “president” to resign. In spring 2020, the coronavirus epidemic complicated the plans of billions of people, including in Abkhazia.
However, Abkhazia would not be Abkhazia if the crypto mining ban had been strictly adhered to. There are still many large mining farms throughout Abkhazia, with which the Abkhazian authorities can do very little. The stakes are very high.
There is no need to seriously expect Abkhazia to become a serious international centre of the crypto currency market. At least until it solves the rather painful problems in the energy sector and in the field of investment and entrepreneurship.