A Russian-controlled energy company operating in the Republic of Abkhazia is considering regulation for the booming cryptocurrency mining industry in the Caucasus region. The move came after the power requirements for the sector increased astronomically in the recent weeks, even to the point of plunging the whole region into darkness.
According to a report from Eurasianet, the mining facilities are mostly located around abandoned Soviet-era factories that had stopped operations decades ago. As the winter season is reaching its peak, much of the electricity network will be needed by the population which is mostly based around the black sea.
According to Aslan Barsia, the head of Chernomorenergo, a state-run energy firm:
“This [cryptocurrency mining] 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 reason why miners came here in the first place is that it has cheap hydroelectricity available in the form of a dam in Georgia, the country from which the region separated with Russian intervention. But, due to the falling water levels in the reservoir as well as increased usage due to cold spells, cryptocurrency mining will have to take a back seat in the coming months at least.
Abkhazia is a state formally recognized by a handful of countries, including Russia and Syria. Most UN member nations legally recognize it as part of Georgia, who has since 2008 declared Abkhazia to be a Russian-occupied territory. It is under the indirect control of Russia but due to the Russian interest in cryptocurrencies, mining and blockchain, the region may be in for a progressive leap forward in the industry.
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