Winter is coming in the small state of Abkhazia. The state of Abkhazia, mostly unrecognized, has expressed fear over the massive use of its shaky electric supply to mine cryptocurrency. The state emerged as a cryptocurrency haven after annexing itself away from Georgia which also offers favorable conditions for cryptocurrency mining including low rates of electricity.
However, high electricity usage has threatened to deny the common citizen regular electric supply as mining has proved untenable.
The Abkhazian have enjoyed relatively low tariffs on electricity. Households pay about 40 Kopeks (0.6 Cents) for a Kilowatt of electricity. Additionally, the power supply is in such abundance that the government estimates that 30 to 40 percent of the population doesn’t pay for power.
The small state finds itself in a quagmire. On one hand, the long troubled electricity supply in Abkhazia is feeling the weight of cryptocurrency mining and may plunge the small state into darkness come this winter. On the other hand, Abkhazia has curved itself a niche as a cryptocurrency mining powerhouse.
Government officials as well as cryptocurrency players have been pitted by this imminent fear on two opposing factions. There have been calls for regulation of the cryptocurrency industry to bring on board laws that will address proper utilization of power during mining. However, industry players are of the opinion that any regulation to be adopted ought to be enabling rather than restrictive.
Aslan Basaria, head of the state-run energy company speaking on the situation on the ground said that,” the so-called mining farms put an additional load on our grid, the transmission lines and substations that are loaded to capacity even without it.”
According to him, “if temperatures fall, there is a risk that electricity will not reach regular customers not engaged in crypto mining.”
Economic Laissez Faire
Abkhazia has inculcated an economic policy of Laissez Faire in its Economy. This essentially allows its citizens to enfranchise themselves with minimal government interference in the form of taxes, tariffs or other restrictive rather than enabling laws.
Those in the cryptocurrency business have come out to register their disapproval of any limits on the consumption of electricity. The tiny nation has come off the back of civil wars, a mass exodus of the pre-war populace and now depends on troops from the Kremlin and others allied to the former Soviet Union for protection.
It remains to be seen how this small nation, with a proposal to float a national digital coin pending, will prepare its house in readiness for winter. Crypto is Coming!
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