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Abkhazia prohibits the extraction of cryptocurrencies

Why? A lack of electricity and supervision

Cryptocurrency mining has been temporarily banned.

Why? Authorities say the process consumes too much electricity, which is already a problem. A government decree states that "the priority should be the nutrition of the population, of social and industrial structures".

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What is the extraction of cryptocurrency?

Mining is the process of extracting Bitcoin electronic money and other cryptocurrencies using special equipment: high-power computers, which solve mathematical problems of calculation through a special program.

Anyone with a computer can enter for the extraction of this money. But the so-called "farms" have become more effective.

These "farms" are combined into swimming pools for an even greater effect.

Dozens and even hundreds of thousands of people participate in the pools. A participant in that pool receives a reward equivalent to his mining capacity.

The extracted bitcoins can not only be exchanged within the network for various goods and articles, but also converted into real money.

Important aspects of the mining sector

There is no centralized management. Therefore, the extraction process can not be blocked or subjugated. The system is completely anonymous. Users are not required to provide official personal data. Because of this, tracking any transaction is simply impossible.

Cryptocurrency and its value do not depend on states or governments.

Another reason for banning mining in Abkhazia is the lack of control over the process

To date, several dozen mining "farms" are currently operating in Abkhazia. Now they have all been outlawed. Not only the main energy company Chernomorenergo, but also the Ministry of the Interior and the State Security Service will seek potential violators.

The Chernomorenergo press service announced that 15 cryptocurrency mining companies have already been disconnected from the power system. The total amount of electricity they consumed was equal to the consumption of the entire Sukhumi region.

The situation with electricity in Abkhazia is rather complicated. The main supplier is IngurGES, which is in poor condition and its productivity decreases every year.

The restoration of IngurHPP is an even more difficult task, since after the Georgian-Abkhaz conflict of the 1990s, it is right in the conflict zone: the station is on the Abkhazian side and the dam is on the Georgian side. Any rehabilitation work requires a complex and not always successful agreement between the parties.

But the lack of electricity is just one of the reasons for the ban on engaging in the mining sector. The other is the absence of legislation corresponding to this type of activity. The budget of Abkhazia, for as long as the republic's farms worked for mining development, did not receive any transfer in the form of taxes.

Given the difficulty in solving both reasons for the ban, it will probably act for a very long time.

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