The Republic of Abkhazia is reported to have cut power from 15 cryptocurrency mining facilities located in the country. The government cited electricity consumption concerns as the primary reason why it decided to go ahead and cut off power to the mining facilities.
15 Cryptocurrency Mining Farms in Abkhazia without Power
Chernomorenergo RUE, the country’s electricity organization, announced the decision to cut off power to the mining facilities via Facebook on 31st December 2018.
The post stated that the fifteen mining facilities have a total capacity of 8,950 kilowatt-hours. This amount is equivalent to the total electricity of more than 1,800 households. The shutdown is one of the recommendations proposed as a temporary solution to the high consumption electricity by some of the customers in the country.
Chernomorenergo also stated that the cryptocurrency mining facilities owners have since collaborated with the organization and understand the reason why the decision was made. Notably, this is not an isolated case, electricity consumption regulators in different parts of the world have aired concerns about the massive amount of electricity consumed by cryptocurrency mining facilities.
Last year in November, Norway decided to end electricity subsidies offered to Bitcoin mining farms in the country. One of the parliamentary representatives from the Socialist Left Party, Lars Haltbrekken, told parliament that the country could not afford to continue offering tax incentives for the production of the dirtiest form of digital currency. Lars also stated that Bitcoin mining requires a consistent supply of electricity and generates copious amounts of greenhouse gases that pollute the environment.
Here in the United States, Chelan County Public Utility District, in Washington State, seems to be reading from the same script. It has recommended a new electricity pricing structure for cryptocurrency mining facilities. The new pricing structure is designed to pass down the cost of the increased demand for electricity. That is, the proposed pricing structure puts into consideration the costs of producing power and at the same time safeguards the customers’ investments.
A recent report showed that the total revenue earned by Bitcoin miners in the first six months of 2018 exceeded the results in 2017. However, some of the cryptocurrency miners considered the profit made as miniature due to the high cost of electricity and other operating expenses. At the time of preparing the report, the total fees and rewards earned by Bitcoin miners had surpassed $4.7 billion in the first nine months of 2018. It is also reported that the miners earned approximately 54,000 Bitcoins per month.
In December 2018, Chinese cryptocurrency miners were ranked as the largest short sellers of Bitcoin both internationally and locally. Increase in hedging operations in the bear market is one of the plausible causes of this shift in the market. The new generation of cryptocurrency miners also opted to hedge their earned coins to cushion themselves from market risks. Read more cryptocurrency news here.