Author: Amb. Valeri Chechelashvili, Senior Fellow at Rondeli Foundation


According to various sources, Georgia is one of the leading countries in Bitcoin mining and therefore, covers a substantial part of overall world mining of Bitcoin – about 15% (See:, In addition, the sources talk about Bitfury Company only, which is apparently not only the biggest player in Georgia, but also one of the largest in the world, even though a large number of other companies also mine Bitcoin in Georgia.

It must be pointed out that the information in this regard is rather controversial and conflicting; however, three conditions are beyond doubt:  a) the amount of electricity used for Bitcoin mining is rapidly growing every year; b) such an excessive consumption has already become a subject of serious discussion in some countries such as China and Iceland; c) Georgia is indeed one of the leading countries in the world in Bitcoin mining. even put Georgia as the overall leader in this area. The website points out that Georgia, China and USA together mine about 80% of Bitcoin worldwide (See:

It is clear from the volume of mining that a large part of Bitcoins mined in Georgia goes to the international market through electronic trade platforms, which means it is exported. It should be pointed out that this fact is not recorded in the statistics of our export structure.

We must assume that the numbers are large, facilitating the inflow of foreign currency in our country, therefore making the trade balance healthier and the exchange rate of GEL stronger. It can also be theorized that the amount of Bitcoin mined in 2017 exceeds the volume of additional electricity imported in the country, which is USD 66 million. This assessment is reinforced by the factors presented in the respective tables in the first part of the blog:  in 2016, Georgia was a net exporter of electricity, whilst in 2017 GDP growth was much lower than the growth of electricity consumption.

It is interesting to know what the share of the electricity used in mining Bitcoin in overall consumption is. According to certain data, the volume is rather significant (See: What Number of Bitcoins mined in Georgia is sold on the international market? This and other questions are waiting to be answered.

Electricity with the value of about USD 1.5 billion is spent throughout the world for mining Bitcoin, mainly in the countries where electricity is cheap (See: According to the same sources, the amount of electricity produced in Georgia is just 1.5 times bigger than the electricity spent throughout the world for mining Bitcoin.

Hence, if the share of Georgia in overall world mining of Bitcoin in 15%, the cost of electricity spent in our country for Bitcoin mining must be about USD 225 million. This is a very large number, which needs to be specified. However, if it more-or-less describes the reality, what amount of Bitcoin is mined in Georgia every year and what amount goes on export?

Of course the state must facilitate the development of modern technologies. Having said that, the entrepreneurs occupied with developing this field must also be interested in making the macro-economic indicators of the country healthier, which will ultimately influence their welfare as well.

The stability of the legal system as well as clear and transparent rules of play are very important factors for the development of businesses. As already pointed out above, the government must be facilitating the development of businesses. It should not be able to unilaterally alter the preferential conditions that have been set. This is entirely unacceptable. At the same time, in the case of Bitcoin mining and trading, we are facing an entirely new, unique development. It has aggressively infiltrated the economic relations and its influence on the economic processes now and in the future has not been assessed properly. Respective regulatory mechanisms have not yet been formed either. States have already started discussing these issues, which is apparent by the examples of China and Iceland (See the first part of the blog). One thing is clear, that both the state as well as businesses must be interested in forming sustainable, clear and just regulatory mechanism in this field.

The business of mining and trading Bitcoin is already firmly onto its feet in Georgia. It would be good if respective companies published data about their economic activities, such as the annual balance. This would satisfy the interest of the public and do away with various types of speculations regarding these issues.

Perhaps a dialogue needs to be started between the government and the entrepreneurs occupied with mining and trading Bitcoin. Such a necessity has already arisen. The aim is to make mutually acceptable, long-term decisions. As one of the options, perhaps a five-year gradual plan could be agreed upon, as a result of which the mining of Bitcoin will return in the ordinary legal framework of our county, which, by the way, is considered to be one of the best in the world. According to the data of 2018, Georgia has improved its positions in this regard by 2.12 points and holds a solid 9th place in the list of assessed countries (See:

This gradual plan may contain a stage-by-stage abolition of the preferential status on electricity prices, land usage and taxes, stretched out over five years. It would be appropriate if the government tasked the Business-Ombudsman with negotiating this deal. This will confirm the strengthening nature of the partnership between the government and the businesses and will allow us to make fair decisions after some time, facilitating both the development of businesses, as well as making the macro-economic indicators of our country healthier

It is clear that the success achieved through the efforts of Georgian energy experts needs to be maintained and further developed. There are respective project and investment plans in plance. The construction and launch of 52 HPPs are planned from 2016 to 2025. Hence, in by 2025, the overall annual electricity generation will increase from 3,718.6 megawatt in 2015 to 6,680.51 megawatt (See: Part of this plan was already implemented in 2016. Four HPPs of small capacity (8.7 megawatts overall), one of medium capacity (108 megawatts), one thermal power plant (13.2 megawatts) and one wind power plant (20.7 megawatts) were launched, the overall production capacity of which is 150.6 megawatts (Source: The implementation of this impressive plan ensured that the 6.2% growth of the demand on electricity in 2016 was met.

It is also very important that these plans are consistently supported by serious international financial institutions. For example, the European Bank for Reconstruction and Development (EBRD) has recently made a decision on funding the Nenskra HPP, for which it confirmed a loan of USD 229 million. This will be a 280 megawatt HPP, which will generate overall 1.2 billion kW of electricity annually (See:

As a result of implementing these plans and a balanced regulatory policy, electricity will definitely have a significant role in making Georgia’s trade balance healthier.