A government raid on an empty warehouse in Abkhazia has raised concerns about the unregulated energy consumption of crypto-mining operations. The facility appeared deserted, but it housed racks of computers that ran nonstop to generate digital currencies such as bitcoin.
As CNN reported, crypto mining is banned in Abkhazia, a Russian-backed breakaway region of Georgia. Yet underground operations persist, amplified by cheap hydropower and weak enforcement. The result: blackouts, grid strain, and growing public unrest.
What is crypto mining?
Crypto mining features the use of high-powered computers to validate transactions and earn digital currencies. The mining equipment runs complex algorithms nonstop, making the process incredibly energy-intensive.
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Usually, the more computational power used, the higher the potential profit. This incentive has led mining operators to fixate on regions with less expensive energy so they can cut costs and maximize returns.
Why is crypto mining drawing serious scrutiny?
Crypto mining’s significant energy footprint is a pressing issue. It can consume electricity at a scale that can rival entire countries. A U.N. study found that in 2020-21, mining bitcoin used more power than all of Pakistan, home to more than 230 million people. This level of use strains grids and can limit access to more affordable energy for communities that need it most.
The International Energy Agency projects crypto’s electricity consumption will grow by 40% between 2022 and 2026. In some cases, operations have sparked public concerns, including reports of pollution from crypto mining facilities.
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“Electricity is the largest cost input to crypto,” Georgetown University professor Theresa Sabonis-Helf said, per CNN. In regions including Abkhazia, that cost is increasingly paid by ordinary residents.
How crypto mining impacts energy access and the environment
Even when crypto mining uses more affordable energy, it can still take power away from local communities. This forces residents to consume more dirty energy. In Abkhazia, the round-the-clock mining has resulted in around 10 hours of blackouts each day, per CNN.
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Additionally, roughly 30% of Paraguay’s electricity is lost, partly because of fraudulent crypto mining. Ongoing rolling blackouts in Tehran, Iran, have also been tied to unchecked mining that exhausts the electrical grid.
Some companies are pushing for greener solutions, including the use of more efficient data centers, but the environmental footprint of crypto remains a concern. The urgency is underscored by a growing scientific consensus.
Leading climate scientists have warned that delayed actions on energy-intensive sectors could have significant environmental impacts. However, there is optimism the sector could drive positive investments in cleaner forms of energy, ultimately proving to be a boon for the long-term health of the planet despite growing pains.
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