The tiny Republic of Georgia seems unlikely to be involved in Bitcoin ( BTC) mining. An underdog for mining, the country boasts abundant hydropower while ranked seventh worldwide for the World Bank’s ease-of-doing-business index — ahead of the United Kingdom and Germany.
Georgia is located at the intersection between Asia and Europe on the Black Sea. It hosts Bitfury’s mining operations, as well as small, independent miners who tap into huge amounts of hydroelectric energy.
Dutch miner Bitfury’s Bitcoin mining operation is located at the foot the Tblisi National Park. Source: NPR
This country is a powerhouse for Bitcoin mining. The Georgia hash rate is 0.18% according to the Cambridge Bitcoin Electricity Consumption Index. However, Arcane Research’s report shows that it is closer at 0.71%.
Jaran Mellerud is an Arcane Research analyst and the author of this report.
“Home mining is big here in Georgia, particularly in areas with subsidised electricity.” People will continue to set up small home mining operations as long as there is electricity subsidy in certain areas of the country.
According to the report, there are at least 125 megawatts worth of crypto mining power. Of these, 62 MW come from large-scale data centers. The remaining 63 MW could then be sourced from many small amateur setups located in garages, homes, and abandoned warehouses across the country.
Mellerud concluded that Georgia’s true hash rate is around 0.71%. This is because 100 MW of Georgia’s 125-MW total crypto mining capacity are dedicated to Bitcoin. It is also multiples of the CBECI’s 0.18 estimate.
Although the trend of Bitcoin miners moving towards untapped energy resources, cheaper energy, or simply cost-efficient places to do businesses is not new it is still a double-edged sword.
Nearby Kazakhstan hosted 18% of the global hashrate due to cheap electricity and loose rules. Now, regulators are considering taking action and proposing power price increases and taxes.
Mellerud knows that, despite Georgia’s business friendliness, rising electricity prices could discourage miners from setting up their operations. Cointelegraph was informed by Mellerud:
“I don’t believe that the Georgian government wants to expand mining operations in Georgia, as miners already use almost 10% of the country’s electricity, contributing towards the country’s growing electricity shortage.”
Bitcoin and the flag of Georgia. Source: Georgiawealth.info
Mellerud stated that there was no additional capacity for industrial-scale mining.
Home mining-miners that have less than 1 MW of capacity may still thrive. Despite the fact that Svaneti, Georgia, is required to swear to Saint George to end crypto mining the country has a generally positive attitude toward the new asset class.
The abundance of clean, cheap hydroelectric power in Georgia means that small-time crypto enthusiasts can still use Bitcoin mining heat to heat their homes in the mountains.
