The Caucasus has always been a center of commerce. Besides Istanbul, the Caucasus was considered to be an alternative “East meets West” hub. Thankfully, geography is not prone to changes over time and the region still retains multiple opportunities for various businesses.
It may strike as a shocker, but the Caucasus region, mainly the country of Georgia, is considered to be one of the most active Cryptocurrency hubs around the world. In the past, when the crypto boom was in full swing, Georgia was classified as one of the Top 3 countries with the most mining activity.
Most of the credit goes to BitFury, a large crypto mining company that had its base in multiple Georgian cities. With high-rises full of mining gear, making millions within a single day. However, now that the crypto winter has set in and passed us, many crypto mining companies started to either suffer horrible losses with revenue, or just went bankrupt. Many of them are still searching for alternatives.
Pay less, Make more
Some believe that BitFury’s success was thanks to local government connections. But even if there weren’t any type of nepotism involved, the electricity and rent prices in Georgia are sometimes ten times less than in developed countries. It was no wonder that the costs were as low as possible, and the profits were through the roof. Thanks to this massive success, BitFury was able to become what it is now. Furthermore, labor in Georgia was also extremely low. In the best of cases, the salary for a top executive would have been around $60,000.
Not much has changed after the crypto winter in fact. The prices remain the same in terms of labor, electricity and rents, so Georgia could be a great destination for other crypto mining companies.
Before we get to the similarities with other countries, I want to mention a completely opposite situation in South Africa. You see, cryptocurrency trading in Georgia is absolutely nothing compared to the scale of mining procedures. When we compare that to BTC trading in South Africa, we get a completely different picture. The trading surpasses mining several times. So a question is born after this. Should a mining company have its base where trading is minimal or at its peak? Let’s answer it.
Cryptocurrency mining, is not something local. If you ever want to succeed in this industry, you need to make your business global, the whole nature of the technology demands it and makes it possible. Therefore for a company to be descouraged by a lack of trading is unrealistic. What they should be interested in, is the costs of operating in that country.
Much like Georgia, South Africa is also a great destination, but the costs there are way smaller. Furthermore, the government of Georgia has already fully supported the idea of featuring cryptocurrency companies in the country, therefore no legal issues may arise as well. The company tax is low and the operations are rarely tampered with.
The only issue with Georgia is that it already has a major company based there. Will BitFury be welcoming competition, or will they be desperate to discourage it? That’s a question minor crypto companies need to ask themselves. Can they go toe-to-toe with BitFury?
Giorgi is a news reporter and financial analyst at www.forexnewsnow.com He has 3 years of experience in analyzing the financial markets of Forex and cryptocurrencies. He also likes making hidden jokes in his articles.