According to Arcane study, Georgia’s small population is a dark horse for Bitcoin mining, accounting for over 1% of the industry’s total hash rate.
At first look, the tiny Republic of Georgia seems to be an odd suspect in Bitcoin (BTC) mining operations. Although it is a mining underdog, the nation has ample hydropower and is placed sixth in the World Bank’s ease-of-doing-business ranking, ahead of the United Kingdom and Germany.
Georgia, located on the Black Sea at the crossroads of Europe and Asia, is home to Bitfury’s industrial mining operations as well as smaller, solo miners that rely on massive quantities of hydroelectric power.
The nation has a lot of potential for Bitcoin mining. While the Cambridge Bitcoin Electricity Consumption Index puts Georgia’s hash rate at 0.18 percent, Arcane Research’s extensive and long-term research shows the figure is closer to 0.71 percent.
Jaran Mellerud, an analyst at Arcane Research and the report’s author:
“Home mining is big in Georgia, especially in regions with subsidized electricity. As long as there are electricity subsidies in certain regions of the country, people will continue setting up small home mining operations.”
According to the analysis, at least 125 megawatts of crypto mining capacity exist, with 62 MW coming from industrial-scale data centres. “The remaining 63 MW should then come from a slew of modest amateur installations strewn around the nation in homes, garages, abandoned warehouses, and industries.”
Mellerud finds that Georgia’s true total hash rate is in the 0.71 percent range because “100 MW of Georgia’s 125 MW total crypto mining capacity is devoted to Bitcoin and Georgia’s hardware is as efficient as the network average.” He noted that it is several times more than the CBECI’s 0.18 percent estimate.
While the tendency of Bitcoin miners travelling to unexplored energy supplies, inexpensive energy, or just cost-efficient regions to conduct business is not new, it is a two-edged sword.
In neighbouring Kazakhstan, which previously hosted up to 18% of the global hash rate because to cheap electricity and lax restrictions, officials are already contemplating intervention, suggesting power price increases and levies.
Mellerud is aware that, despite Georgia’s “business friendliness,” “increasing power rates” may discourage miners from establishing operations:
“I don’t believe the Georgian government wants more mining operations in the country, as miners are already using almost 10% of the country’s electricity, contributing to the country’s growing electricity deficit.”
Mellerud went on to say, “I feel there is no place for greater capacity in industrial-scale mining.”
Instead, home mining–miners with units less than 1 MW–may thrive. Despite requests for people of Georgia’s Svaneti region to make a holy oath to Saint George in order to prohibit crypto mining, the nation as a whole has a “positive attitude toward the new asset class.”
Small-time cryptocurrency aficionados may continue to utilise Bitcoin mining waste heat to heat their mountain homes, using Georgia’s abundance of “cheap and clean hydroelectric electricity.”