Cryptocurrency mining causes blackouts in territory that belonged to the Soviet Union
Abkhazia, an autonomous republic in the Black Sea region that was once part of the Soviet Union, is on the tail of cryptocurrency miners, according to a Reuters report published earlier this month. The reason is that the government of the small country blames them for the recent blackouts that left part of its 240,000 inhabitants without electricity.
In December, authorities raided homes, factories and even restaurants to cut power cables from mining equipments. Now parliament is discussing the creation of a law that would give the police the right to seize the devices. It should be noted that the country is recognized as an independent state only by Russia. The rest of the world regards the territory as part of Georgia.
“They really did have a kind of electricity crisis because of the amount of cryptocurrency mining that is going on,” Maximilian Hess, a researcher at Foreign Policy Research Institute, told the news agency.
The interest in mining for digital assets in Abkhazia has been going on since 2016. The activity has proved profitable there because of the cost of kilowatt-hours (kWh), is US $0.005 – 20 times less than that of the United States. In recent years, according to Reuters, the small nation has won 625 farms for ‘manufacturing’ cryptocurrencies.
In 2018, the government tried to stop the activity, but was not very successful, as the import of mining hardware still remained legal there. In September 2020, authorities lifted the ban and asked miners to pay higher electricity tariffs. But then it went wrong.