We are happy to share the newest edition of our Crypto Geography series, published by our partners at CryptoGlobe.
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The new edition of Crypto Geography explores what is going on with cryptocurrency regulation and the prospects of crypto assets in Georgia. You might be surprised to know that, according to the World Bank report, in 2018 Georgia was the third-largest cryptocurrency mining country in the world with 5% of its citizens engaged in mining. As of 2020, cryptocurrency mining in the country has not lost its popularity. And this is confirmed by constant international conferences held on its territory, as well as an increase in the number of ATMs for the exchange and purchases of cryptocurrency.
Below you will find a sneak peek of this article written by our head of PR and crypto expert Solomon Brown. If you want to find out more about how Georgia has become such a prominent crypto mining country, click here for the full article.
Georgian Crypto Mining Triumph
In Georgia, cryptocurrency mining is very popular. The chairman of the Energy Regulatory Commission of Georgia, Irina Milorava, said that electricity consumption in the country in recent years has increased by an average of 5%, and in 2018 the growth was almost 8% compared to 2017. Although the regulatory commission does not have information about the share of mining in the total indicator of electricity consumption, over the past six months, the energy consumption in several regions has grown so much that the network often could not manage it and the supply of electricity to the population was limited, which most likely was caused by the increase in mining.
The growing popularity of mining in Georgia can be explained by the availability of cheap electricity in the country. So, the cost of electricity for those who consume more than 300 kWh is: for residents of Tbilisi — 23.0395 tetri (7.5 cents), for residents of other regions — 22.733 tetri (7.4 cents).
Such favorable conditions for the development of the crypto business did not go unnoticed by foreign companies wishing to mine digital currency on an industrial scale. So, in 2014, the Dutch company BitFury built their first data center in Gori with a capacity of 20 MW, and, in July 2017, a second one in Tbilisi with a capacity of 40 MW. Investments in these projects amounted to about 30 million US dollars.
After the launch of these projects, Georgia broke into the list of leading countries in industrial mining, and BitFury controlled up to 15% of all Bitcoins produced in the world.
It should be noted that BitFury has received huge benefits from the Georgian government, including the purchase of a land plot of 2.5 acres for the construction of a data center in Tbilisi, that cost a symbolic 1 lari. And a few months later this territory received the status of the Tbilisi Free Industrial Zone.
The Dutch company’s path was followed by many ordinary Georgians, private entrepreneurs and foreigners. Many of them began to open mining farms in the Free Industrial Zones in Tbilisi, Kutaisi, Poti, Kutaisi Hualing, as well as in the high mountains of the country, where the cost of electricity is even cheaper.
However, it should be noted that in 2018, BitFury sold its data center in Tbilisi to the Chinese company Chong Sing Holding (Hong Kong) under public pressure. But, this did not reduce the desire of people to engage in cryptocurrency mining in Georgia.