At first glance, Georgia is the size of a pint most likely suspected of bitcoin (BTC) mining activity. As an underdog for mining, the country boasts an abundance of hydropower, and is ranked seventh in the world on the World Bank’s Ease of Doing Business Index, ahead of the United Kingdom and Germany.
Georgia is located on the Black Sea coast at the junction of Europe and Asia, and is home to Bitfury’s industrial mining operations, as well as smaller miners who use large amounts of hydropower.
Bitcoin mining by the Dutch miner Bitfury at the foot of Tbilisi National Park. Source: NPR.
The country is preparing for bitcoin mining. While the Cambridge Bitcoin Electricity Consumption Index sets Georgia’s hash rate at 0.18%, Arcane Research’s detailed long-term report brings this figure closer to 0.71%.
Jaran Millrod, an analyst at Arcane Research and author of the report, told Cointelegraph:
“Home mining in Georgia is popular, especially in areas with subsidized electricity. As long as there are electricity subsidies in some parts of the country, people will continue to run small-scale home mining operations. ”
The report shows at least 125 megawatts of crypto-mining power, of which 62 megawatts are used in data centers on an industrial scale. “The other 63 megawatts must come from a multitude of small amateur devices scattered around the country in abandoned houses, garages, department stores and factories.”
Millerod concludes that the true total hash rate in Georgia is 0.71% because “100 megawatts of Georgia’s total 125 megawatts of crypto-mining capacity is for bitcoin, and Georgia’s hardware is as efficient as the average network.” He added that this is 0.18% higher than the CBECI estimate.
But while the trend of bitcoin miners toward untapped energy resources, cheap energy or just profitable places to do business is not new, it is a double-edged sword.
In neighboring Kazakhstan, which recently had 18% of global retail tariffs due to cheap energy and lax regulation, regulators are already considering intervention by proposing higher energy prices and taxes.
Millerod understands that despite being “business-friendly” in Georgia, “high electricity prices” can prevent miners from getting started. He told the Cointelegraph:
“I do not think the Georgian government wants more mining in the country, since miners already use about 10% of the country’s electricity, which contributes to the country’s power shortage.”
Bitcoin and the flag of Georgia. Source: Georgiawealth.info
“I do not think there is room for more industrial-scale mining capacity,” Millerod added.
Alternatively, home miners with rigs below 1 megawatt can continue to thrive. Despite calls for Swanians in Georgia to take an oath to St. George and stop extracting cryptocurrencies, the country as a whole is “positive about the emerging asset class.”
Young crypto enthusiasts can continue to use the waste heat from bitcoin mining to heat their homes in the mountains, using the abundance of “cheap and clean hydropower” in Georgia.