The former Soviet Republic of Georgia is currently ranked among the leading countries in the space of cryptocurrency and now in second place after leaders China. This move is due to the country’s electricity subsidies and regulation.
It Is Powered By an Accommodating State
Though mining has its economic benefits, it has always been under scrutiny by potential investors due to its high energy requirements. It primarily decreases its worth in other jurisdictions.
Georgia has remained even more attractive for crypto mining, because of their electricity subsidies and a region like Alazani Valley that currently has lower rates, which ultimately attracts more mining activities. In addition to that, the country uses cheap hydropower.
These benefits have significantly led to the trickling of more investors including Bitfury, which controls over 15% of the mining activity in the country. The interest of mine in the state has been supported through a waiver on the payment of value-added tax and preferential tariffs.
Are There Any Opportunities In Cryptocurrency Or Its Just Hype And Corruption?
Georgia’s acceptance of cryptocurrency might be viewed as typical industry publicity, but the most relevant issue is how the move has been accompanied by controversy. The dominance by a foreign company has implied that they will only benefit from the mining activity and there are doubts if Georgia will receive any whatsoever.
While there are reports concerning a growing number of local prospectors who are currently gathering to most parts of Georgia to prepare their gigs, the special treatment of foreign firms like Bitfury by Georgia has created a significant concern considering that their profits will be sent to their country.
There have been fresh allegations that Bidzina Ivanishvili, Georgia’s prime minister is connected to an investment fund with interest in the company. However, Bitfury has firmly denied the allegations.
Bitfury, US IT Service Management Company, has no plans to leave Georgia any time soon. It has significantly created a healthy relationship with Georgia like their partnership with the Georgian National Agency of Public Registry in a Blockchain land titling project. In addition to that, they supported the country socially through aiding the 2015 flood victims.