In the breakaway region of Abkhazia, on the outskirts of the city of Sukhumi, law enforcement officers recently raided a quiet warehouse. Inside, there were no drugs or weapons – just a large cabinet filled with electronic machines. It was a crypto mine.
Though crypto mining is banned in Abkhazia, the industry has quietly grown for years, drawn by the region’s cheap hydropower. But now, it’s causing serious problems. Once powered mostly by renewable energy, Abkhazia is struggling to keep the lights on. As crypto mining drains electricity around the clock, the region has been hit with daily blackouts – reaching up to 10 hours a day in some cases.
Officials have warned of a looming “humanitarian catastrophe.” To cope, Abkhazia is now importing more electricity from Russia, much of it generated by fossil fuels. That means crypto is not only draining local resources, but also increasing climate pollution.
A Global Pattern
Abkhazia’s story is extreme, but not unique. Around the world, crypto mining is booming, and it’s hungry for power.
According to CNN, Bitcoin mining alone now uses more energy each year than Pakistan, a country of over 230 million people, according to a 2023 United Nations study. The International Energy Agency predicts that crypto’s electricity demand could rise another 40% by 2026.
Crypto miners are drawn to regions with cheap electricity – often places rich in renewable energy. But this can create major challenges for local communities, especially where access to power is already fragile.
“Electricity is the biggest cost in crypto,” explains Theresa Sabonis-Helf, an energy security expert at Georgetown University. That’s why miners – both legal and illegal – are chasing the cheapest sources they can find.
Winners and Losers
Some companies say they’re trying to do it right. Florida-based MARA Holdings, for example, bought a wind farm in Texas to power its Bitcoin mining operation. The company also has facilities in Paraguay that run on hydropower. A spokesperson called this a “win-win,” claiming the company uses energy that would otherwise go to waste and helps stabilize local grids.
But critics argue that this optimism overlooks real risks. In Paraguay, many households still burn firewood for heat. If clean energy is diverted to crypto, everyday people may be forced to rely on dirtier, more expensive sources.
Illegal mining is also a growing problem. Paraguay’s state energy company reports that nearly 28% of electricity is lost annually, in part due to unlicensed crypto operations.
Ethiopia has also attracted crypto miners, thanks to its hydropower potential. Singapore-based BitFuFu recently bought a stake in a Bitcoin mining facility there. But local experts are skeptical.
“Nearly half the country lacks reliable electricity,” said Mikael Alemu Gorsky, co-founder of a solar energy company in Ethiopia. Even in the capital, residents may only get power three days a week. “There’s no excess electricity,” he warned. “Businesses are forced to use oil-powered generators.”
A Growing Backlash
This tension – between the promise of crypto profits and the needs of local people – is fueling resistance. In Abkhazia, frustration has boiled over. In one village, residents reportedly set fire to crypto equipment in protest.
“We’re in the 21st century, and our people are dreaming of electricity,” said Nugzar Kasya, a community leader. “If there’s any respect for the people, they should shut down the mines and let us live.”
Experts are now calling for stronger regulation and better technology to ensure crypto’s growth doesn’t come at the cost of energy access and environmental health.
“Mining is spreading into areas already struggling with power shortages and environmental issues,” said Kaveh Madani, an environmental scientist and co-author of a UN report on crypto mining. “It raises deep questions of inequality – who profits, and who pays the price?”
A Better Way Forward
Stories like Abkhazia’s show just how much damage unchecked crypto mining can cause – draining clean energy, worsening power shortages, and leaving local communities behind.
That’s where ECOX Network comes in.
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It’s proof that crypto doesn’t have to come at a cost to people or the planet.
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