Georgia Goes After Crypto Miners Using Subsidized Electricity in Historic Town – Mining Bitcoin News

A record high consumption of electricity blamed on illegal cryptocurrencies in northwest Georgia has caught the attention of authorities in the capital Tbilisi. The central government and the local service are dealing with the issue of dealing with electricity shortages in the mountainous region of Svaneti.

With Tourism Affected by Pandemic, People in Georgia Turn to Crypt Mining on Low Energy

The government of Georgia, a small nation in the Caucasus, has joined forces with energy distribution company Energo-pro to address the growing illegal use of electricity to mine cryptocurrencies in the Svaneti region. The move was announced by the country’s Minister of Economy and Sustainable Development, Natia Turnava, at a press conference this week.

The extraordinarily high energy consumption of mining properties in the area of ​​the historic city of Mestia It’s been a hot topic for a whole month now, the Novosti-Georgia news agency reported. Svaneti has attracted miners with its low electricity tariffs introduced for companies working in the mountainous region. The people of Mestia have access to free electricity.

By the end of December, residents of Svaneti had to tolerate a limited electricity supply regime. Underground crypto miners have been blamed for the shortages and damage to the power grid. Minister Turnava commented:

Of course, illegal electricity consumption is unacceptable, especially the problems with domestic mining that exist there. We are working with the local government, as well as with Energo-pro Georgia, which is supplying electricity to Svaneti, to gradually solve this problem.

Residents of Mestia staged several demonstrations demanding the closure of the mining estates and accused local authorities of protecting the miners. Georgia, meanwhile, has threatened to raise electricity tariffs for the region. Despite this and the protests, consumption has not yet decreased.

“Compared to previous years, consumption has grown by 237% this year,” the municipality of Mestia revealed in a statement last month. Local authorities have also urged residents involved in the coinage of digital currencies to quit the activity.

Natia Turnava expressed her hope that people in the region would not risk endangering the tourist season. With beautiful scenery, medieval towers and ancient traditions, Svaneti and Mestia have attracted thousands of visitors in the past decade. However, as the number of tourists declined amid the Covid-19 pandemic, locals found an alternative source of income in mining.

Georgia became a mining hotspot several years ago, when the country ranked as the second most profitable place for bitcoin miners after China. According to a 2018 study by the Cambridge Center for Alternative Finance (CCAF), the nation also ranked second in terms of electricity consumed for cryptocurrency mining. As of August 2021, its share of the global average monthly hashrate was 0.18%.

Do you think that the Georgian authorities will be able to solve the problems of electricity supply in the Svaneti region? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a technology-savvy Eastern European journalist who likes Hitchens’ quote: “Being a writer is what I am, rather than what I do.” In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.