Why this tiny country is one of the top crypto mining jurisdictions in the world

Crypto Law Insider is the leading legal authority for entrepreneurs and investors in the cryptocurrency and blockchain ecosystem.

This month, we were honored to welcome a new board member to Zen Blockchain Foundation, the Delaware nonprofit that builds and maintains the Horizen blockchain ecosystem. Dr. Davit Mrelashvili, a brilliant neurologist and a vocal advocate of crypto across Eastern Europe and the Caucus.

I met Dr. Mrelashvili in person for the first time recently when he came to Panama. He’s very knowledgeable on many different subjects, and we had some fascinating discussions on everything from business to neurology and even longevity. 

dean steinbeck horizen blockchain foundation board
Zen Blockchain Foundation board members Dean Steinbeck, Rob Viglione and Davit Mrelashvili

Though currently based in the US, Davit is originally from the Republic of Georgia. For those of you who are familiar with the Georgian culture, you’ll know that Georgians are some of the most friendly and hospitable people in the world. That warmth is apparent the minute you meet Davit.

But that’s not all that Georgia is known for. The country is reputed to be a great place to do business, with strong banking, low costs of operation and no corruption. Georgia also currently one of the leading countries in crypto mining. 

So naturally, I had to find out more about this jurisdiction for Insiders

Read on in today’s interview, as I sit down with Davit to get his take on the future of privacy coins and his on-the-ground insight on Georgia as a crypto-friendly jurisdiction.

How did you first get involved with Horizen? 

I had known Rob Viglione, one of the founders of the Horizen (formerly Zencash) project for a number of years before Horizen was born. 

After hearing his vision and meeting the team, I was enchanted. 

Initially, I assumed the role of a regional director in Russia/CIS market. Later on, was offered to join the board of directors – that I accepted with delight. 

What made you interested in this particular project? 

A pivotal factor in my decision was the long term vision of decentralizing and securing people’s privacy in today’s increasing censorship environment. 

The fact that we have an awesome team of like-minded individuals from all over the world, was another piece essential that convinced me to join.

What are you hoping to accomplish by joining the Horizen board?  

Today, there still exists a fair-sized gap between the ideology of government regulators and the blockchain industry. 

I think Horizen’s culture, through its radical transparency and decentralized governance model, is very well positioned to close that gap and lead everyone else by example. 

I hope to take a part in that historic mission of steering the organization towards that goal. 

You have been very involved with spreading Horizen across the Caucasus and Eastern Europe. Why do you think that Horizen has been such an appealing project for people in the region? 

There are multiple reasons, but the one that especially comes to mind is the fact that people in that part of the world (post-Soviet) have especially been subjected to centralized censorship and lack of privacy for many years. 

Horizen, for them, was the perfect blend of innovative technology and a privacy tool to safely harbor their assets – both information and financial assets. 

Can you tell us about the acceptance of crypto in your home country, Georgia? 

A few facts themselves speak of crypto-friendliness in the country. Even though Georgia is a very small country, smaller than Panama, the country ranks (or at least was recently) #3 in the world for the amount of Bitcoin mined. After the US and China.

It is no secret that Georgia is the main harbor of BitFury – the king of the bitcoin mining industry. And that did not happen by chance. A few contributors to this are the country’s favorable regulations, subsidized electricity prices and tax-free opportunity zones. 

How favorable is the government to this new technology? 

I would give Georgia as a crypto-friendly jurisdiction a “friendliness score” of at least 9 out of 10, relative to other countries in real-time. The Prime Minister of Georgia has clearly stated that one of his priorities is the development of the blockchain industry

In addition, there was recently a whole committee created in the Ministry of Finance to advise regulators on the future development of blockchain-related projects in the country. 

Another interesting fact is that Georgia was the first country in the world to start using blockchain for land registration in 2016. Now, they already have over 600,000 applications for plot registration. 

In recent years, Georgia has become a hotbed for crypto miners. Why is this and do you think the country will continue to play a significant role in the crypto mining industry in the future?  

There are a number of reasons why Georgia is such a popular place for crypto miners. Subsidized electricity costs and favorable taxation are to name a couple. 

Of course – BitFury’s presence there has its own “Brand value”, which attracted other companies to the country. There are also a number of worldwide crypto conferences held annually in Georgia. 

These events have led to a formation of whole mining culture there that has taken on a life of its own and continues to evolve. 

All the present and past events clearly point to strong continued growth of the crypto industry in the region. 

Georgia is also known for its stable banking system. What is the local banking system’s attitude toward crypto? Are banks open to working with crypto projects? 

Georgia indeed has a fairly modernized and stable banking system. A number of Georgian banks can be found trading on the London Stock exchange for example. That is something that not many post-Soviet countries can boast to have. 

In regards to crypto projects – I would describe their approach as “cautiously optimistic”. At the very least, crypto projects are not treated negatively, like they are in many other industrialized countries due to government scrutiny. 

I say “cautiously optimistic” because dealing with crypto projects inherently involves a certain “reputation risk” in today’s worldwide financial arena. So when banks are hesistant to accept crypto projects, it is understandable.

Dean Steinbeck is the Managing Director of Crypto Law Insider, the leading legal authority for entrepreneurs and investors in the cryptocurrency and blockchain ecosystem.

Dean is a US corporate lawyer with a focus on data privacy and technology. With over 15 years of experience representing VC-backed software development companies, Dean has found himself at the center of multiple blockchain projects and is currently recognized as one of the top attorneys in the cryptocurrency space.

Dean currently serves as General Counsel for Horizen (formerly ZenCash), a privacy-oriented cryptocurrency and cutting-edge blockchain platform. Prior to Horizen, Dean was General Counsel at TigerConnect, the leading communication platform in the US healthcare market. His experience gives him an in-depth knowledge of the legal intricacies within blockchain technology, data privacy, intellectual property, venture capital funding and regulatory compliance. Click here to learn more about Crypto Law Insider.



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