Countries that encourage Bitcoin mining usually have two significant issues to deal with; the environmental impact, and the consumption of power. Many countries set out to become safe havens for miners, but not many of them prepare for the potential fallout, which could be significant in itself.
Bitcoin Mining’s Issue With Energy Consumption
The mining space has been particularly vibrant this year, as the Bitcoin mining hash rate has set milestone after milestone this year alone. Thanks to the resurgence in the prices of cryptocurrencies, mining is profitable once more, allowing miners are once again free to run amok.
However, while the news of increased mining activity is music to the ears of Bitcoin enthusiasts, few are willing to speak about the toll that this activity takes. Recently, European news medium Intellinews reported that Georgia, a country recognized as a powerhouse for Bitcoin mining, is losing up to a tenth of its total electricity supply to mining.
Citing a podcast episode starring David Chapashvili (a representative of environmentalist pressure group Green Energy), the news medium notes that the problem is most prevalent in the Svaneti region, where harsh living conditions informed the government’s decision to provide electricity free of charge. Chapashvili noted that a mining farm operated by BitFury alone takes up to 4 percent of Georgia’s total electricity, which amounts to about 389.7 million kWh.
More shockingly, he added that despite this consumption, the government is unable to point out how many miners operate within the country’s borders.
What Can Georgia Do?
Finding out the number of miners operating in a region could be solved with regulations; particularly, the enforcement of a licensing measure, which would require individuals or companies interested in opening mining operations in the country to get approved by the Ministry of Energy. This allows the power authorities to identify where the energy is going to.
Iran was rumored to be considering that back in September, and apart from helping guarantee accountability, the move is practical as it could help with budgeting and providing revenue estimations.
As for the issue of electricity consumption, solutions are much more complex. Sadly, Georgia isn’t the only country facing this. Back in August, the International Energy Association (IEA) reported that Bitcoin mining consumes as much electricity as a mid-sized country. But, the good thing is that the bulk of the energy is acquired from renewable sources.
For Georgia, this isn’t much of a problem. Statistics from the IEA shows that over 80 percent of the country’s generated power is from hydroelectricity. The country also has an energy surplus, so the question of electricity consumption through mining is more of a non-issue.
For other countries looking to regulate their mining spaces, keep electricity for everyday users, and maintain the growth of their mining industries, these are your role models right here.
Images courtesy of Shutterstock.
Did you know you can trade sign-up to trade Bitcoin and many leading altcoins with a multiplier of up to 100x on a safe and secure exchange with the lowest fees — with only an email address? Well, now you do! Click here to get started on StormGain!