The President of Abkhazia, Aslan Bzhania, revealed during a press conference that abkhazian authorities have seized 6,000 cryptocurrency mining machines.
The region offers miners affordable fees and low energy spending
Cryptocurrency mining activities in Abkhazia are banned until March 2022, due to the increased load they generate on the power grid and the electricity shortages they cause.
The seized equipment is kept in a special warehouse, but according to some estimates there are around 30,000 more in operation in the country.
Some time ago, the region became a major cryptocurrency mining location, thanks to low electricity costs and virtually no taxes, which attracted many miners, but caused ongoing problems with the power grid.
The country long ago launched a fight against crypto mining to reduce electricity consumption, so that there are now no longer any large mining farms in the country. However, there are still many crypto miners, as the inhabitants themselves use mining as an alternative source of income.
Bzhania would like to legalize this business by setting up a special “technoparks” where miners could mine cryptocurrencies legally, but in the meantime, it has authorized the police to seize equipment en masse.
Energy production issues and the idea for conscious cryptocurrency mining in Abkhazia
Last Friday, during a meeting of the council president with the leadership, it was admitted that the fight against crypto mining in the country so far has not produced tangible results.
The process of mining cryptocurrencies is, to all intents and purposes, a very energy-intensive activity, and for a country with electricity production and distribution problems this can definitely aggravate the situation.
The government believes that to date, mining is one of the main causes of the country’s growing electricity deficit.
The temporary ban was introduced in 2018, but has since been extended until 31 March 2022. Despite this, it does not seem to be working.
According to energy engineer Pavel Maksimov, the reason for the failure of the ban is the difficulty of exercising real control over unauthorized miners, as inspectors rarely manage to find them.
Given the failure of this policy, it is possible that not only will the actual raids against miners continue, but the country may also decide to intensify them.
The government’s other line of approach to solving the energy problems is to reach an agreement with neighbouring Russia to receive additional electricity supplies to allow miners to mine legally. For now, however, this solution does not seem to be on the way.