There are dozens of examples where a specific country’s economy was boosted because of the government’s decision to welcome cryptocurrencies with open arms. But there are very few examples of a country like the Republic of Georgia, where companies and individuals can mine cryptocurrencies like there’s no tomorrow, not having to pay taxes as well as having low costs when it comes to electricity and labor.
It’s safe to say that the blockchain took off in the Republic of Georgia because of Bitfury’s activities within the country. At some point, the company was mining as much as 15% of all Bitcoins in the world but has since reduced its output in favor of diversifying into other coins.
The Georgian government displayed amazing acceptance towards cryptocurrencies as they saw it as an escape from the surmounting inflation and economic uncertainty in the region.
The country of Georgia is heavily reliant on its tourism industry alongside wine exports. Both of which have been recently cut off by their biggest client, the Russian Federation.
Despite the tense relations between the countries Russian tourists and wine importers were always a happy sight for Georgians as it always meant more profits.
Now that those profits are gone, many Georgians will have to start looking for alternative income sources, one of which is already at their doorstep.
Thanks to the fact that one of the exchanges operating in the country is a crypto mining firm in itself, the local population is able to get their hands on the assets without having to pay too much in commissions as well as avoiding any unnecessary procedures.
But how did such a small nation become the world’s third-largest crypto producer? Let’s try to find that out.
For a European country, Georgia is quite cheap. Even when comparing it to Easter European states that are still developing, like Ukraine or Belarus, it still stands out as an ultimate budget destination.
However, this doesn’t only work for tourists. Multiple foreign crypto miners have set up shop in the country and are operating large mining farms because of how cheap the electricity is.
To give you an example, mining one Bitcoin when it was trading below $4,000 cost around $3,400 for the miners. Meaning that even though their profit margin was relatively low, they still managed to push through the crypto winter relatively unscathed.
The biggest contributor to Georgia’s mining power is, of course, Bitfury, but there are other companies as well like Birtvi that do cloud mining. Most of the other miners you’ll meet are individuals with private setups at home or small commercial spaces.
Due to pressure from Russia in the north, the local currency has become extremely volatile and has reached peak appreciation in history.
Currently, one United States Dollar is worth 2.90 Georgian Lari. It may not sound too harsh in comparison to the Ukrainian Hryvnia and Russian Ruble inflation, but it’s still a 100% increase over the course of just 15 years.
According to Kapitali.ge, a Georgian financial website, the local population is basically deprived of the opportunity to effectively invest in traditional financial markets. However, during the 2017 crypto craze, most Georgian investors managed to strike it big with shitcoins that they later sold during the crypto winter.
It’s all about perspective for the Georgian population. The more money they can make with the lowest amount of investments and risk, the better for them. In a realistic scenario, such a thing is practically impossible, right?
The crypto craze showed most Georgians that such a thing could actually happen, and that’s why so many are now interested in further investments.
But due to the recent market update, they’re still refraining from investing a single dime before everything falls. Quite typical for a beginner investor.
Several large blockchain firms have already had talks with the Georgian financial regulator, which is the National Bank.
There is no existing crypto regulation in the country, which makes business extremely easy. Popular names like Cardano have already appeared in the country, promising the integration of the Blockchain in the education sector of the country.
The IT sphere is also in the development phase, promising employable local population for future companies willing to open a branch in the Caucasus nation.
As it stands right now, the Georgian government does not plan to introduce any restrictions or even taxes on crypto mining and trading. It’s starting to look like the most profitable region to open a crypto company in the future.
The Internet of Things Application (IOTA) is a distributed ledger that was developed to record…
Chainlink is a decentralized blockchain oracle service that acts as middleware that seeks to link…
Image Credit Recent media reports suggest that Cole Diamond, CEO of Canadian crypto exchange Coinsquare,…