
Despite Bitcoin’s Dive, a Former Soviet Republic Is Still Betting Big on It - cyanbane
https://www.nytimes.com/2019/01/22/business/georgia-bitcoin-blockchain-bitfury.html
======
wscott
I clicked on the link thinking. "Oh, some country is using Bitcoin as a
reserve currency. That could be interesting."

But no. Georgia is allowing an American company mine Bitcoin at scale. It uses
a lot of power and a lot of infrastructure. But isn't a huge bet or anything
interesting.

~~~
cal5k
I'd love to see a government experiment with having its central bank issue a
dollar-backed stablecoin.

I mean, fundamentally the issue is that the rise in digital payments puts most
of the money supply in bank ledgers... if the money supply was on a public
ledger, individuals could still deposit it with a bank, but they could also
send it peer-to-peer if they so chose.

~~~
sidko
The loss of privacy in this case may not be worth using a public ledger.

In general though, I think it would be an interesting experiment if
individuals can hold central bank money directly instead of going through
commercial banks.

~~~
cal5k
I think there are plenty of ways that privacy could be regained... layer 1
settlements, use of an anonymous protocol like MimbleWimble, etc. It wouldn't
necessarily need to be Bitcoin as it's implemented today.

But I agree... that experiment would be quite fascinating. It might not even
be that big of a change... most people would probably continue to entrust a
bank with their funds, and banks could potentially continue to operate a
fractional reserve system.

------
kuhhk
> Georgia provided land and cheap electricity so Bitfury, an American company,
> could set up a Bitcoin mining center in Tbilisi.

I hope they realize the digital currency doesn't necessarily "stay" in
Georgia. Either way, the prime minister provided a loan out of his own
investment fund, and it's been paid back. Not sure they are betting big on
crypto, but they are using 10% of their electricity for it...

~~~
DoctorOetker
>The governing Georgian Dream party sold 45 acres for $1 for Bitfury to set up
shop.

yes this looks like textbook corruption: the government just "gives" land and
energy to cryptocurrenncy mining operations? seems very probably that not the
government but those in government who set it up are getting crypto bribes in
return...

~~~
SlowRobotAhead
Happened all over the US last year. Lots of cities around me gave tax breaks
and land to bring in “hundreds of tech jobs”... what we actually got was 12
jobs and jet engines cooling the servers stuffed in old buildings to the
locals annoyance.

There was money to be made in crypto. But not by buying coin low and selling
high.

~~~
DoctorOetker
wow, I didn't know this was happening in US as well, are there any articles on
the subject you can recommend?

~~~
bardam
See this N.Y. Times article focusing on Plattsburgh, NY:
[https://www.nytimes.com/2018/09/19/nyregion/bitcoin-
mining-n...](https://www.nytimes.com/2018/09/19/nyregion/bitcoin-mining-new-
york-electricity.html)

~~~
DoctorOetker
thats sad on so many levels of course, but least comprehensible at all is:

>With electricity so cheap that most residents use it to heat their homes, the
city’s consumption exceeded its allocation on several days, Mr. Read
explained. As a result, the Municipal Lighting Department had to purchase
additional power at much higher prices — a cost it spread across its
customers.

The machines are generating heat (and cryptocurrency) from electricity the
locals were using to generate heat... At least they could have co-located the
machines with the locals in a way that heat can be exchanged with inside and
outside, and a meter measuring energy consumption when heat is directed
inside...

The least wasteful form of mining is by replacing electric heaters with mining
rigs, but that's not what happened here, it's more like going to the library
to fetch some books because you ran out of toilet paper...

thanks for sharing the article

there's lots of similarities in this article with the Georgia one: besides the
local economic depression, in both articles they also mention the local prison
and the local casino...

~~~
DoctorOetker
it's really a shame they're not even trying to be creative:

for example why not use the heat to pasteurize milk? co-locate the miners with
the pasteurization plants

even better: desalinate water to steam, use the steam to heat the milk and the
milk to cool the steam, now you have desalinated water AND pasteurized milk...

but oh no, that would actually create a job for a couple of people to work it
out and change the plants and negotiate and discover similar opportunities...

------
granaldo
Dived since the last year, but price has been stagnant within 3000 - 4000
range for the few couple of months

~~~
simias
The last big dive from ~6500 occurred mid-November. That might be old news by
cryptocurrency standards but 2 months isn't a whole lot of time.

~~~
wolco
Big money is now involved so expect the next climb to happen quickly and the
next crash to be in quickier.

------
Mengkudulangsat
Without knowing the absolute production capacity and utilization pre-Bitcoin /
post-Bitcoin; that 10% isn't a very useful metric.

If Bitcoin is using locally underutilized electricity, I don't see anything
wrong with this adventure.

------
quantumwoke
I have some friends who started working on interesting projects in the crypto
space after Bitcoin 'died'. It seems to me there is still some potential for
innovation in this area, as evidenced by the market sizing. Just need to cut
some of the ICO/marketing cruft away and be realistic about its usecases.

------
sauliusm
Nice touch on referring to Georgia as a "former Soviet Republic". The article
must have then described Bitfury as a company from a former British colony :)

~~~
MarsAscendant
Referring to Georgia as a "former Soviet Republic" is similar in tone to
calling Ukraine "a historic part of Russia".

There _were_ both what they've been called, sure, but given the current state
of relationship between Russia and any of the two countries, it's like looking
for trouble.

EDIT: what?

~~~
Mikeb85
Ukraine __is __a historic part of Russia though. It never was a country on its
own until 1992. And I say this as someone with Ukrainian heritage. My
ancestors never immigrated from a country called Ukraine even though they were
Ukrainian (or back then often called Ruthenian). It 's just historic facts.

~~~
MarsAscendant
> It never was a country on its own until 1992

That's beside the point. Right now, there's a growing nationalist sentiment
growing in Ukraine. If you go to Ukraine and shout this historical fact in the
streets of, say, Kiyv, you might just encounter a group of people who
violently disagree with the "underlying idea" (which you won't express, but
they'll perceive) that Ukraine is Russia's bitch.

Imagine shouting about the Armenian genocide in Instanbul, or about the
extermination and oppression of Native Americans in a major city in Texas.

Maybe not exactly, but you get the idea.

> My ancestors never immigrated from a country called Ukraine even though they
> were Ukrainian (or back then often called Ruthenian)

That kind of Ruthenian?
[[https://en.wikipedia.org/wiki/Kingdom_of_Galicia%E2%80%93Vol...](https://en.wikipedia.org/wiki/Kingdom_of_Galicia%E2%80%93Volhynia)]

Or that kind of Ruthenian?
[[https://en.wikipedia.org/wiki/Ruthenians_and_Ukrainians_in_C...](https://en.wikipedia.org/wiki/Ruthenians_and_Ukrainians_in_Czechoslovakia_\(1918%E2%80%931938\))]

Your ancestry might as well be "Polish with a mix of Lithuanian", 'cause who
knows at this stage, no? Did you take a DNA test?

~~~
Mikeb85
> Right now, there's a growing nationalist sentiment growing in Ukraine

Yes there is, but Ukrainian Neo-Nazis aren't exactly known for their
understanding of history.

> Imagine shouting about the Armenian genocide in Instanbul, or about the
> extermination and oppression of Native Americans in a major city in Texas.

Except Ukrainians and Russians are the same people, and it's Germans and
others who slaughtered them.

> Your ancestry might as well be "Polish with a mix of Lithuanian", 'cause who
> knows at this stage, no? Did you take a DNA test?

Maybe, it's a region that's had many conquests and we're all mixed to some
degree. But my ancestors all spoke Ukrainian and were Orthodox, and Slavic
culture has always been defined by culture, not necessarily ethnicity.

~~~
MarsAscendant
> Except Ukrainians and Russians are the same people

I don't think that's for either of us to declare.

I'm at least quarter-Ukrainian from my father's side (I think my parental
grandfather was Russian, but parental grandmother was certainly Ukrainian).
You sound like you have much less than that in you. We're in no position to
dictate who's one people and who aren't.

I do consider Ukrainians and Belarussians brotherly peoples, from my view as a
Russian. I wish either of them no harm, and all the best, and hope that no
major conflict arises between either of the three.

But they're going to be the ones to tell me what nation they are and what
other traits they identify themselves with.

> and Slavic culture has always been defined by culture, not necessarily
> ethnicity.

I don't think Slavic culture – if there is, indeed, such a thing – defines
itself _with itself_. It can't be its own description, see?

Aside from that... Don't you think there's this whole new massive issue of
nationality that defines a people?

~~~
Mikeb85
> I don't think that's for either of us to declare.

Were the same people then? Historically there were few differences.

> You sound like you have much less than that in you.

Ethnically? Mother is 100% Ukrainian.

> I don't think Slavic culture – if there is, indeed, such a thing – defines
> itself with itself. It can't be its own description, see?

Historically, Slavs are defined by language and culture. Kind of like various
Celtic groups. Just the way archaeologists and historians group them.

> Aside from that... Don't you think there's this whole new massive issue of
> nationality that defines a people?

Of course nationality matters now and to the future of a country. It's all
that really matters. But people shouldn't try to rewrite history.

------
PhasmaFelis
Is Bitcoin diving again? I can never keep track.

~~~
username223
No, it has been meandering around $3600 for a month or so (around the average
electricity cost to mine one[1]). To put that in perspective, at that price
the total value of all bitcoins that will ever exist is about $75 billion.
That's close to the total value of Swiss Francs or Mexican Pesos in
circulation[2], which still seems insane to me given that you probably can't
even use it to buy lunch.

[1] [https://www.marketwatch.com/story/heres-how-much-it-costs-
to...](https://www.marketwatch.com/story/heres-how-much-it-costs-to-mine-a-
single-bitcoin-in-your-country-2018-03-06)

[2]
[https://en.wikipedia.org/wiki/Circulation_%28currency%29](https://en.wikipedia.org/wiki/Circulation_%28currency%29)

~~~
SlowRobotAhead
>No, it has been meandering around $3600 for a month or so (around the average
electricity cost to mine one[1]).

I had wondered why that $3300-3600 mark seemed to be the bottom. That seems to
be a fair explanation. It doesn’t seem good. I wonder; has the demand for gold
ever been lower than the cost to mine it?

>which still seems insane to me given that you probably can't even use it to
buy lunch.

Anyone still calling it a “currency” doesn’t seem to grasp what currency is
supposed to be. Crypto-commodity is much more appropriate.

~~~
brazzy
> I wonder; has the demand for gold ever been lower than the cost to mine it?

It has definitely happened that mines were closed because of a decline in
price:

[https://www.cdfund.com/en/gold-mine-closures-due-to-
current-...](https://www.cdfund.com/en/gold-mine-closures-due-to-current-gold-
price/)

