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The tiny Republic of Abkhazia has high hopes that the extraction and cryptocurrency operations may be its solution to economic problems. But the ramshackle ex-Soviet electricity the network is already at full capacity, leaving the risk of blackout if a cold snap occurs.
Where is the Republic of where now?
Abkhazia is a de facto republic on the east coast of the Black Sea. It was formally part of Georgia, although only Russia and some other countries recognized it as a state. The United Nations still disputes that it is legally an autonomous part of Georgia.
It seems that both Georgia and Abkhazia share a new love for cryptocurrency, not least because of the low cost of electricity. In fact, considering the energy consumption, Georgia is second only to China in terms of cryptocurrency extraction. Another thing shared by Abkhazia and Georgia is a Soviet-era hydroelectric complex, struggling to meet the needs of both countries during the winter.
Abandoned Soviet factories
Cryptocurrency miners have moved and created mines in long-abandoned factories and warehouses. Aslan Basaria, head of the state-owned energy company Chernomorenergo, explains:
This puts additional burden on our network, transmission lines and substations that are loaded up to capacity even without it. If temperatures fall, there is a risk that electricity will not reach regular customers.
There is also a big problem in stealing electricity, and 30 to 40% of customers pay nothing. The authorities must reign on both issues, to avoid the collapse of the electricity grid this winter.
On the other hand
However, cryptocurrency is giving the besieged region the opportunity to attract investment and trade. Because the cryptocurrency is free of state regulations, it allows politically sensitive regions to avoid international restrictions.
During a blockchain conference in Moscow, the BCSG even proposed to coin its own cryptocurrency, the "currency of the Republic of Abkhazia". The head, Yevgeniy Galiakhmetov, suggested that the cryptocurrency could bring the region into a future of economic prosperity and eventful international trade.
Balancing the need to regulate against the promotion of innovation? It seems that the Republic of Abkhazia is not so different from any other side.
Does the extraction of Bitcoin and cryptocurrency increase the economies of autonomous regions such as Abkhazia? Let us know below!
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