The crypto mining industry is thriving lately with more and more nations joining the bandwagon. Just last month, Bitmain, the world’s leading manufacturer of mining hardware, opened what is supposedly the world’s largest crypto mining farm.
The 33,000-acre facility holds a capacity of 300 MW in total. The process of mining cryptocurrencies requires a huge load of computational power, and with great power comes a great demand for electricity. With more and more miners joining in, the power demand is often too high to be met.
The same is the case with Georgia, which is now the world’s third-largest nation to mine cryptocurrencies after China and Venezuela.
As per a BBC daily podcast, reports state that the scale of mining within the country has reached such an extent that the nation is facing a power outage. The crypto mining farms in Georgia have such huge load that it is “sucking the power grid dry.” In fact, these mining enterprises comprise 10% of the entire country’s electricity consumption.
The problem reportedly persists in the Svaneti region where electricity is free due to harsh living conditions. Free electricity has drawn quite a lot of enterprises and the area has developed into a Bitcoin mining economy that is also “patronised by high-ranking officials” according to locals quoted by Kommersant daily. The locals face frequent power outages. Governor of Mestia town in Svaneti, Kakha Zhorzholiani, said:
“People were without power for almost a week because of Bitcoin mining that caused protests. We held talks with miners in one of the villages and agreed that they would stop working. But this can repeat tomorrow and the day after tomorrow.”
Documents that were revealed to the Business daily by David Chapashvili from the Green Energy environmental group, states that a mining farm owned by BitFury is supposedly consuming 4 per cent of the entire country’s electricity, which means this number equals to 389 million kilowatt-hours. According to Chapashvili, the nation is clueless about the ill-effects cryptocurrency mining on the country’s energy consumption.
“There are lots of micro-miners,” he said. “If you ask a very simple question to the ministry like which sector is consuming [energy] Georgia doesn’t have this kind of analysis.” He added, “Actually, in reality we don’t know what’s going on or how many consumers are [mining Bitcoin].”
BitFury, however, considers that the energy it uses is little compared to that required to mine precious metals and other resources.
According to the International Energy Agency, more than 80% of the nation’s power is hydroelectric. Adding to this, reports state that the country is only exploiting 25 per cent of its potential renewable energy sources. BitFury even considers that the presence of cryptocurrency miners is actually driving support to renewable energy. The extra energy produced from hydroelectric plants is being put to good use by placing mining centres close to the plants and using that excess energy.
It is quite possible that despite the negatives, the thriving mining industry that has developed in Georgia can turn out to be quite fruitful for the nation’s economy.