A small de facto and partially recognized republic, north of Georgia, called the Republic of Abkhazia, has shut down operations of many cryptocurrency mining farms amid concerns of huge electricity consumption by the same.
State electric utility Chernomorenergo RUE announced in a Facebook post on Dec. 31 that they shall cut power to 15 cryptocurrency mining farms with a total capacity of 8,950 kilowatt-hours (kWh). This energy is tantamount to the electricity consumption of 1,800 households or the entire city of Sukhumi, the capital of Abkhazia. The authorities called it a temporary measure to limit the consumption of electricity by certain categories of subscribers. The utility board also mentions that the owners of the facilities have shown understanding and participation.
Abkhazia is legally considered as a part of Georgia by many members of the United Nations. However, Georgia lacks control over the territory and is recognized as an independent state by Russia, Venezuela, Nicaragua among others. Electricity is a major problem in Abkhazia with many areas reporting widespread blackouts. The consumption situation is very difficult as per Chernomorenergo. The residents noted that due to such a move there is a sharp decrease in tension in the network, and such a thing has never happened before.
There has been considerable debates and concerns over the crypto mining industry’s widespread electricity consumption. Even though Bitcoin miner revenues are increasing compared to previous years’ revenues, miners themselves are not seeing much profit. Miners paying retail electricity prices have shifted towards unprofitability. Cryptocurrency mining has become a tedious process and only large companies with “deep pockets” can afford to continue with it because of the electricity costs. This has also led to a rise in a disturbing trend of hackers placing crypto-mining malware on devices, networks, and websites at an alarming rate to mine for cryptocurrencies in a process called crypto-jacking. Cryptojacking involves installation of a crypto-mining malware in your network by ‘Phishing,’ that is tricking someone on the inside of a network to click a link that is sent via mail or pop-ups. Once they get into the network, they “borrow” your computer when you are not looking, to mine for cryptocurrencies.
Many countries are putting their foot down on cryptomining farms, reportedly. Recently, Norway stopped giving electricity subsidies for Bitcoin (BTC) mining facilities. “Cryptocurrency requires a lot of energy and generates large greenhouse gas emissions globally, ” said Lars Haltbrekken, member of Socialist Left Party justifying the action. Chelan County Public Utility District of the state of Washington in the United States has laid down a new electricity pricing structure for cryptocurrency miners intended to control the increasing electricity demands.