Economic Relevance of Crypto Mining in Georgia

On June 11, the team leader of the German Economic Team Georgia, Dr Ricardo Giucci, presented the Economic Monitor Georgia at the Deutsche Wirtschaftsvereinigung (DWV) in Tbilisi.

The event focussed on the presentation of the results of an analysis conducted by GET Georgia on the economic relevance of cryptocurrencies for the Georgian economy.

So far, there is no clear concept of cryptocurrencies’ relevance for the country. In fact, Georgia is one of the biggest producers (“miners”) of cryptocurrencies worldwide, but there is no profound analysis of their economic relevance as of today.

GET Georgia has conducted the – to our knowledge – first analysis that deals with the topic in a detailed manner. Due to the restricted data situation regarding cryptocurrencies, we have first analysed energy consumption that is used for the production of cryptocurrencies in the country. As mining requires considerable server capacities, energy consumption reflects such activities. Using further estimates, we were able to calculate the annual production of cryptocurrencies from the additional energy consumption. By including the average price, we were able to derive the revenues of the industry. In a further step we accounted for the costs and calculated the profits and GDP contribution.