How the tiny nation of georgia became a bitcoin behemoth
I came across an excellent article today during my after-office hours commute back home that left my eyes wide open with a new revelation. I am talking about the article published on National Public Radio titled: A very heartwarming article but it has helped me understand more about how Bitcoin is sustainable in the future. In the article, it talks about Georgia, the heartland of winemaking, has changed after Bitcoin mining company, BitFury, moved into their country.
We can see where this is coming from. A reasonably small country, in terms of land size, population, GDP, but a good place for tourism I would say. Tech giants move in because of the access of relatively cheap electricity for mining farms. While you may think that Georgia is getting ripped off, Georgians are actually profiting by joining the mining of cryptocurrencies. This has led to a "digital gold rush". Since when have you ever listened to your over-controlling governmental parents especially when they say, "It's risky.
And be VERY careful. The article has definitely changed the way I look at how large corporations always seem to gain profit in a centralized manner. What I failed to look at is how large corporations tend to start an ecosystem of some kind, leading to newer opportunities that may present itself to the commoner like you and me.
Flickr - Philippe Put. In Georgia, most of its cheap electricity comes from hydroelectricity produced in excess. A renewable source of energy is also a form of free resource that once tapped on, can be very crucial in our high-tech electronics and microchip-based futures.
Bitcoin mining has become some sort of an energy converter that converts how the tiny nation of georgia became a bitcoin behemoth directly into digital currency with high monetary value.
Renewable energy tapped on by cryptominers is almost equivalent to large power plant manufacturers selling off free energy. Renewable energy is a free resource. Knowing how to tap onto it and to use it means generating new revenues that contribute to the economy. Right now, blockchain-based cryptocurrency is a sure way of tapping onto such renewable energy converting them into something of monetary value. This changes my knowledge of how Bitcoin is gaining value each day.
It does not lose its value because energy is converted into something useful in the blockchain and it will continue to grow as long as the mining process continues. Finally, I can apply the law of Conservation of Energy for the first time in my life - where energy is neither created nor destroyed but how the tiny nation of georgia became a bitcoin behemoth from one form to another. Great perspective, bitcoin and crypto space is here to stay.
The media says it's risky while the Big Money continues to enter the space. Protect what's yours and HODL. To listen to the audio version of this article click on the play image. Brought to you by tts. If you find it useful please consider upvote this reply. We use energy to produce something valuable. And crypto currency could be one of best example in the near future. You have completed some achievement on Steemit and have been rewarded with new badge s:. Award for the number of upvotes.
To support your work, I also upvoted your post! For more information about SteemitBoard, click here. If you no longer want to receive notifications, reply to this comment with the word STOP. Upvote this notification to help all Steemit users.
But the problem is how to access the 'leftover' electricity by hydro? Are Georgian allowed to build thier own hydro pump anywhere they like? There can be no denial that Bitcoin has changed the way our world works Image source: Wikimedia Commons I came across an excellent article today during my after-office hours commute back how the tiny nation of georgia became a bitcoin behemoth that left my eyes wide open with a new revelation.
Let's take a look at other how the tiny nation of georgia became a bitcoin behemoth of how electricity is powering our economy. Bitcoin is our stored value and energy. Hope this post gives you a new perspective on Bitcoin and cryptocurrencies.
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Thanks for the read!
Cryptocurrency mining has come to Georgia. Andrew North for NPR hide caption. Since long before anyone can remember, the big, fertile slopes of the Alazani Valley in eastern Georgia have been planted with grapevines. It's the heartland of winemaking in the country that invented it 8, years ago. But in recent months, the valley has been going through a new kind of ferment, because of bitcoin.
It's another sign of how this tiny former Soviet republic of fewer than 4 million people has become a virtual printing press for this new money you can't see. Cryptocurrency mining is the digital equivalent of minting real money, except that anyone with the how the tiny nation of georgia became a bitcoin behemoth hardware and software can do it, by taking part in what amounts to a giant virtual competition.
Think of it like a lottery, where computers linked across the Internet compete to solve complex mathematical puzzles, with the number of players constantly rising. The owner of the computer that finds the right solution is rewarded with a "block" of bitcoin or other cryptocurrency, which is then registered and verified on a decentralized database system known as the blockchain.
In practice, it involves a kind of constant digital bombardment to find these solutions, 24 hours a day, consuming huge amounts of electricity. And thanks to its cheap hydropower and low regulation, Georgia is now ranked second in the world for cryptocurrency mining — behind only China. It has generated plenty of controversy too over claims that it received overly generous terms for its electricity bills. But scores of smaller data centers have now sprouted up, with many more people mining from home using processors bought online how the tiny nation of georgia became a bitcoin behemoth China.
One Georgian political party has how the tiny nation of georgia became a bitcoin behemoth started raising funds by mining cryptocurrency via the computers of willing supporters. And because electricity has traditionally been more heavily subsidized in the Alazani Valley, wine country has been seeing a kind of digital gold rush. Hoodie-wearing Buzhaidze is one of the growing army of home prospectors. He signed up last summer, as he watched the price of bitcoin surge, borrowing several thousand dollars from his father to buy three graphic cards, the backbone of any home mining operation.
Ever since, they have been churning away 24 hours a day in the family living room, a constant low hiss emitting from their cooling fans. Bezhani Buzhaidze is one of the growing army of home prospectors for cryptocurrency mining in Georgia.
His earnings how the tiny nation of georgia became a bitcoin behemoth down now from the highs of last year, but it is still a healthy supplement to his monthly salary working at an online marketing company in Telavi. Part of the attraction, Buzhaidze admits, is "easy money. But he adds he is also attracted by the libertarian promise of cryptocurrencies. That is the question. Is this crypto boom going to help or hinder Georgia, a country still struggling with widespread poverty?
Some see an opportunity for Georgia to vault ahead, by embracing the technology and libertarian philosophy underpinning cryptocurrencies. But skeptics fear the country has become an outsourcing center for the global crypto craze, creating few jobs and no lasting gain if it all comes crashing down.
The National Bank of Georgia, the equivalent of the Federal Reserve, has issued a warning, urging people to "exercise caution" about investing in virtual currencies. It certainly looks that way on Bitfury's websitewhich has videos showing executives enjoying ritzy gatherings on the private tropical island of British billionaire Richard Branson.
It has positioned itself as a one-stop shop for all aspects of the businessmaking its own mining chips and software, and consulting other organizations that want to set up data centers or use blockchain technology.
While it has offices in San Francisco and Washington D. A shop in Sandy, Utah, mints physical versions of bitcoins, with codes protected by tamperproof holographic seals. It has an outsize presence in Georgia. According to Bitfury's own figuresit was using around 28 million kilowatt-hours of electricity per month for its mining operations here, equal to the average consumption ofGeorgian households, or 10 percent of the population.
But it pays significantly less per unit, which has fueled charges that Georgia is getting ripped off. Opposition politicians have claimed that the country's richest man, former Prime Minister Bidzina How the tiny nation of georgia became a bitcoin behemoth, is a hidden beneficiary.
An investment fund linked with the billionaire tycoon lent money to Bitfury when it first arrived. But the company's lawyer in Georgia, Eprem Urumashvili, says the loan was repaid, and he denies any financial ties remain. However, the vice chairman of Bitfury's board, George Kikvadzealso has a senior role on Ivanishvili's fund. Perhaps hoping to sidestep all this controversy, Bitfury recently announced it had sold its main data center to a Chinese concern.
But its logo is still emblazoned on the building. And it remains the landlord, according to Urumashvili, as the company runs the surrounding tax-free zone where the data center operates. Bitfury has had unfair press, its lawyer says, insisting that it is looking far beyond mining bitcoin in Georgia. Last year, it helped the government become the world's first to start using a blockchain-based database to secure public records — with the company providing server space and technical expertise.
As with cryptocurrencies, records encrypted on a blockchain are distributed across countless computers, with no single entity having control, making the system both more resilient and harder to tamper with. It began with a property registry.
Next will come marriage certificates and other personal records. Bitfury has also been talking to the authorities in nearby Ukraine about using blockchain technology to run future elections there.
Advocates say this will make it much harder to hack the voting process, in light of allegations that Russia tried to do just that in previous Ukrainian polls, even before accusations of Russian interference in the U.
One small, ultralibertarian Georgian opposition party has more radical ideas. If it ever gains power, the party Girchi — which translates as "pine cone" — wants to issue a national Georgian cryptocurrency allowing citizens to buy unused state assets, including large areas of land. Every Georgian citizen, he adds, would get an allowance of what the party is calling, no surprise, "pinecoin.
He sees longer-term political benefits too, helping the party build a new constituency of libertarian-minded supporters. Japaridze says the party has had discussions with an outside technology company he won't name about the mechanics of creating a pinecoin cryptocurrency.
He envisions a day when there will be no central banks, and property deeds worldwide will be stored on a giant blockchain database with no government or other entity having control. That, he claims, will both give owners greater protection from attempts to disenfranchise them as well as boost overall transparency: Cryptocurrency mining rigs operate at the Golden Fleece company in Kutaisi, Georgia.
The company uses a cargo container with Chinese-built computers inside a dilapidated Soviet-era tractor factory to extract cryptocurrencies using low-cost electricity generated by water flowing from the nearby How the tiny nation of georgia became a bitcoin behemoth Mountains. Girchi believes it is the first party to raise funds via cryptocurrency mining.
When supporters log on to its websitethey are given the choice of allowing their computer processors to be used to mine Moneroa newer virtual coin being marketed for its extreme anonymity. One of Japaridze's team came up with the idea. And when he attended a recent global conference of like-minded political groups, delegates there told him it was the first time any party had tried to raise funds this way, he says.
It has only raised a few hundred dollars so far, he says, but "it has also helped boost our reputation for innovation with younger voters. Such ideas are "just the beginning," says Luka Kobalia, co-founder of a Tbilisi-based company called Blockmentor, which provides training for businesses seeking to use blockchain technology in their operations.
Everything about the way the economy functions is going to change, he says. Facebook groups now regularly advertise conferences and gatherings to share ideas, addressed by people who call themselves "blockchain evangelists. Georgia's finance sector has been sitting on the fence over cryptocurrencies, but some institutions are already invested. The country's Liberty Bank now offers a means of buying and selling the best-known cryptocurrencies via its eMoney service.
But it is still a long way from the point where this virtual money replaces so-called fiat currencies like the U. Like the original Klondike, Georgia's digital gold rush has attracted some colorful characters hoping to make their fortune. Take Andrew Thornhill, an energetic financial entrepreneur from Chicago and founder of a cryptocurrency startup called Spotcoin. He first came to Georgia a decade ago to provide Internet-banking advice. Inhe was briefly imprisoned for fraud, but he says his conviction does not restrict him from running a financial business either in the U.
Now Spotcoin is issuing its own cryptocurrency and setting up an online exchange to make it easier to buy and sell other virtual currencies. Concerns that cryptocurrencies are being used as a money-laundering vehicle have been overdone, Thornhill says when we meet at Spotcoin's Tbilisi headquarters.
And blockchain technology has the potential to make financial transactions far more secure, he maintains. But the world's central banks are right to proceed cautiously, Thornhill adds: I'm a digital revolutionary, not a digital anarchist. While some people outside Georgia may have become multimillionaires thanks to the bitcoins processed inside the huge Tbilisi data center, just down the road is Gldani, one of the city's poorest suburbs. The main street is lined with pawnshops and discount stores.
It's a similar story in many rural areas. Against this economic backdrop, according to professor Tutberidze, it's not surprising so many Georgians have dived into the cryptocurrency craze, hoping for quick wealth. But he warns a how the tiny nation of georgia became a bitcoin behemoth psychology" has developed, with people buying in as prices rise but then panicking and selling again as they fall. He sees it as one of several alarm bells that this could become a dangerous bubble for Georgia.
Many people are spending savings or taking out loans to buy their own mining setups. Such is the demand, a secondary online market has sprung up for mining cards. But it's not hard to find stories of people who have overreached and overpaid, with little chance of ever recouping their investment. Kobalia, the training company co-founder, acknowledges there are dangers. Tutberidze has tried to warn Georgians off it. But the risks are part of the attraction of having left the Soviet planned economy behind, according to Bitfury's lawyer Urumashvili.
Back in Telavi, Buzhaidze says even though his profits are down, he is sticking with it. Accessibility links Skip to main content Keyboard shortcuts for how the tiny nation of georgia became a bitcoin behemoth player. Parallels The former Soviet nation of Georgia now consumes more power in mining cryptocurrencies than the United States.
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