Bitcoin Center in Georgia Denies Links with Ex-PM Ivanishvili

The biggest Bitcoin data center of the virtual currency mining giant BitFury, located in Gldani District, Tbilisi, has rejected the Georgian opposition’s accusations that tycoon Bidzina Ivanishvili, founder of Georgia’s ruling Georgian Dream (GD) and ex-Prime Minister, is a co-owner of the company.

The Bitcoin center also denies charges that the factory consumes a lot of energy but gets electricity at the lowest tariffs.

The BitFury data center, located in a Georgian Free Industrial Zone since 2015, has released a statement publicizing their electricity tariffs and the amount of money they pay for electricity.

According to the statement, in November 2017, the data center consumed 28,516.620 kilowatt hours of electricity and paid GEL 3,514.388. In December, the company used 27,017.100 kWh energy and paid GEL 3,329.587.

“Our electricity tariff was 12.324 Tetri per kWh in 2017 without VAT. From 2018 it is 13.653 Tetri,” the company stated.

The BitFury Group claims the volume of investments made by them in Georgia in the past three years is GEL 140 million, while the number of employees exceeds 180 persons. They also added the average salary in the Gldani mining center is GEL 2,500.

“Moreover, we want to add that former Prime Minister of Georgia, Bidzina Ivanishvili, does not have any shares in the BitFury Group,” the statement reads.

The Georgian National Energy and Water Supply Regulatory Commission (GNERC) increased electricity tariffs in Georgia from January 1, 2018. The GNERC said one of the changes in tariffs was increased consumption of electricity in the country.

Tbilisi-based subscribers of electricity provider Telasi have seen their tariffs increase by 1.5 Tetri and the price per kWh electricity is now 12,980 Tetri for people who consume less than 101 kilowatts electricity. For the second category of subscribers, who consume around 101 - 301 kilowatts, the tariff is now 16,992 Tetri, and for people who consume more than 301 kilowatts - 21,476 Tetri.

Parliamentary opposition party, European Georgia, claims the tariffs increased due to the large amount of electricity consumed by the Bitcoin data center in Tbilisi.

European Georgia member Sergo Ratiani claims that the a Free Industrial Zone was created especially for the factory, adding the factory building was transferred to Ivanishvili for a symbolic price of GEL 1.

The party calls on the government’s economic team to go to Parliament and discuss the issue.

The opposition has slammed the government for the increased electricity and water tariffs, saying the lowering of taxes was the main pre-election promise of the GD, which has instead increased utility fees annually.

European Georgia also says that the electricity tariff of 13,653 Tetri indicated by the BitFury company in their statement, is lower than the tariffs for the remainder of the population.

Akaki Bobokhidze, party member, says that it is clear the company enjoys benefits as it consumes a lot and pays less than ordinary citizens.

BitFury also used to produce Bitcoins in Georgia's Eastern city Gori, but for now mining is underway only in Tbilisi.

Bitcoin is a crypto currency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.

Thea Morrison

15 January 2018 18:59