A country could descend into anarchy as a result of cryptocurrency mining; enraged Abkhazian villagers have allegedly taken matters into their own hands by driving miners out of their areas.
Anarchic uprisings and miners being thrown out on their ears have been the latest developments in the de facto state located in the South Caucus. Politicians seem split on how to handle the situation, which is quickly turning into a national crisis.
Recent changes to the government’s laws pertaining to cryptocurrency mining have seen it first outright banned, then reversed, and now the government is being pressured to make yet another U-turn after local energy providers claimed the power network was nearly collapsed.
Top lawmakers have called emergency meetings, according to the news outlet Ekho Kavkaza. Speaker of the lower house of parliament Valeriy Kvarchia has informed MPs about a case in the village of Duripsh, in the Gudauta District of Abkhazia, the de facto republic backed by Russia that is recognized by most nations as an autonomous republic of Georgia.
Village residents “decided to resist mining efforts themselves, without contacting [law-enforcement] authorities,” according to Kvarchia.
The speaker added,
“[The villagers have] shut down all the farms that were mining cryptoassets. And there was a big scandalous gathering. Similar situations may occur in other villages and other cities, too.”
The government’s permit-based system, which permits miners to work freely in Abkhazia as long as they register and pay taxes on their earnings, has already been pushed out by MPs this week. The government believes that taxing miners could bring in up to USD 661,000, but many citizens are currently experiencing prolonged power outages, with two-hour shutdowns occurring frequently throughout the region.
However, brownouts and blackouts have been documented throughout the area as miners keep working hard and taking advantage of the cheap energy costs and lowering winter temperatures—all the while, cryptocurrency prices are surging.
The claims on social media that the former minister of the state’s economy is running “one of the biggest crypto mining farms in Abkhazia” have further muddied the waters.
A presidential envoy to parliament is quoted by the same media outlet as saying that tougher sanctions are already being implemented for unregistered miners. The president’s office claims that the government has already taken action by extending a ban on mining rig imports to be extended beyond its initial December 2020 target for an additional four months, despite the cabinet’s calls for more action.
Nonetheless, a plethora of evidence indicates that attempts to prohibit the importation of mining rigs into Abkhazia are largely futile.
Meanwhile, in Russia, a man who was also a cryptocurrency miner was hospitalized with burns to his hands, back, and neck after a wildfire in his St. Petersburg apartment broke out, according to 78.ru. Firefighters battled the fire for forty minutes. According to the media outlet, the man’s mining hardware experienced a potentially fatal overheating fault as a result of his failure to install a cooling system.