Have you ever heard of Abkhazia? The Republic of Abkhazia is a partially recognized republic on the eastern coast of the Black Sea near the Caucasus. The place is set in the northwest of Georgia and it has a small population of 240,000 people. This small country is now the stage of a new blockchain battle for the regulation and even survival.
A state-run energy company in the country is calling for the proper regulation of crypto mining in the country as the winter draws near. The reason? To avoid letting Abkhazia getting sucked into a blackout.
According to the original report, there are many crypto mining farms in the country and most of them are set up on abandoned Soviet factories. The main problem for the country is that these mining farms are spending too much energy. This could lead to a fatal blackout in the electricity of the country.
As the energy is harder to get in the Winter due to a range of local issues concerning the Black Sea, the poor country could face several power shortages because of the Bitcoin mining companies. Energy is already scarce in the country and the additional load created by the companies does not help it. If the temperature gets too low, there may not be enough energy for regular customers, the state0run Chernomorenergo company affirms.
Regulations To Curb Mining
As a way to prevent the power shortages, the energy company is now set on regulation. During the Winter, the water levels of the old hydropower complex that powers the country make it harder to efficiently generate energy and people spend more energy as well.
If there is no state intervention, the country could be affected by the power shortages. Electricity is cheap in the country, so miners are eyeing the region, but at the expense of the people living there. Another reason why miners like it so much are because not a lot of countries recognize the existence of the country and this created a chance to mine in a secluded region.
Because of all this, the plan is to restrict crypto mining in the country. This would probably curb the industry in the country and maybe even kill it, but a lot of people will not be very happy to get blackouts in the middle of the Winter because someone decided to mine Bitcoin there.
The Crypto Winter
The crypto market has been actually facing its own Winter recently. The bear market is making most companies lose all their money and only a few mining companies were able to resist so far. With the market struggling so much, there is almost no way that the local industry could survive if a negative legislation would be passed.
Unfortunately for the industry at such a bad time, crypto mining is far less important than people having electric energy in the Winter, so I would guess that most of the countries residents who were not directly related to crypto mining would shun the market away happily if it meant to not have problems with it.