The Hidden Cost of Crypto Mining

In Sukhumi, a city in Abkhazia, the booming cryptocurrency industry is putting immense pressure on electricity supply. The region, known for its hydropower, once relied on the Inguri Dam to meet energy needs. However, the rapid growth of Bitcoin mining has led to power shortages and frequent blackouts. Miners operating in this energy-intensive industry use powerful machines that require massive computer power and perform endless calculations to validate digital currencies. With increasing electricity consumption, local officials, including Badra Gunba, warn of a looming humanitarian catastrophe. Despite a ban, mining operations persist, forcing the Abkhaz authorities to depend on Russia for fossil fuel-based energy, further worsening climate pollution.

A Global Battle for Energy

The issue is not limited to Georgia. Countries like Paraguay, home to the Itaipu hydroelectric plant, and Ethiopia, where power is mainly from renewable energy, are also experiencing the impact. In Hernandarias, miners exploit clean energy, driving up electricity prices while low-income households struggle with firewood for heating. Meanwhile, in the U.S., MARA Holdings, based in Florida, is investing in a wind farm in Texas to reduce costs, with Fred Thiel, its chairman and CEO, promoting its sustainability. However, experts like Theresa Sabonis-Helf from Georgetown University and Mandy DeRoche, a deputy managing attorney at Earthjustice, caution that electricity demand for data centers and AI will surge, straining energy grids. Reports from Reuters, AFP, and experts like Christian Rizzi and Daniel Duarte confirm that unchecked energy use could increase greenhouse gas emissions and worsen the carbon footprint. Even former President-elect Donald Trump has hinted at turning the U.S. into a crypto mining hub, while geopolitical concerns, like the control of Greenland and the Panama Canal, add complexity to the global energy security debate.