The Republic of Abkhazia is currently running the risk of destabilizing its entire power grid system due to the heavy rate of cryptocurrency mining, according to Eurasia.
People can be easily forgiven if they do not know where the little state rests on their map. Apart from the small size of the country which can easily seem lost on your world atlas, the country is only recognized as an independent state by a handful of other countries such as Russia, Georgia, Venezuela, and Syria.
The Republic of Abkhazia broke out from her parent country Georgia almost two decades ago but has been met with a lot of international restrictions. The country which has less than a population of 250,000 rests on the eastern region of the Black Sea and remains a partially recognized republic.
The Rise of Cryptocurrency Mining
Its parent country, Georgia, comes only second to China as the choice state of the cryptocurrency mining industry, and on that list, Abkhazia does not come far off. The incredibly cheap rate of electricity and tariffs has been a major deciding factor for many startup mining establishments, as deserted farms and isolate large expanse of lands are being converted to a site for mining digital currencies.
One of the main sites which are shared by Abkhazia and Georgia includes a hydroelectric complex of Soviet-era, is known to pose problems during the winter. The problem is feared to aggravate this winter, however, due to the increasing rate of cryptocurrency mining in the country.
Winter Worries and Gifts
The problem of power has caused some institutions to cry out for regulations to be put in place, to address the consumption of electricity by miners in the country. The head of Chernomorenergo, an energy company in the state, aired his concern:
“This puts additional load on our grid, the transmission lines, and substations that are loaded to capacity even without it. If temperatures fall, there is a risk that electricity will not reach regular customers.”
The issue of digital currency mining is not one that could be easily addressed, however, given the encouragement the government has given it since its introduction into the state. Digital currencies have been viewed as a solution capable of arresting the slumping economy of Abkhazia. Also, the government believes digital currencies could help skirt the international restrictions imposed on the Republic of Abkhazia.
The government is also reported to be considering creating its cryptocurrency: dubbed the ‘Abkhazia Republic Coin.’