Industry

Cryptocurrency could be used to finance construction of the Roghun hydropower plant, says expert

Tajik authorities have announced the arrest of a group of persons engaged in mining cryptocurrency.

The Interior Ministry Ramazon Rahimzoda told reporters in Dushanbe on February 19 that the law enforcement authorities have revealed 53 cases of illegal use of electrical equipment for the release of cryptocurrency and 14 criminal proceedings have been instituted.

The minister refrained from giving further details. He just noted that the Republican Commission for Control over the Economical Use of Electricity, chaired by him, had revealed theft of electricity for a large amount.

An official with the Tax Directorate for the Sughd Province, Isroil Naimov, told reported in Khujand on February 11 that four persons engaged in illegally mining cryptocurrency were detained in the Bobojon-Ghafourov District.

According to him, they used more than 200 computers and other office equipment for mining cryptocurrency. The detainees are also accused of theft of electricity and tax evasion on income. Made from obtaining cryptocurrency, Naimov said.

Meanwhile, some experts believe that Tajikistan having huge reserves of inexpensive electricity, with competent management, could become one of leaders in mining cryptocurrency. According to them, incomes derived from cryptocurrency mining could cover all the costs of construction of the Roghun hydroelectric power plant (HPP). This requires liberal legislation and intellectual resources.

Karimjon Ahmadov, who had served as Deputy Minister of Economic Development and Trade of Tajikistan in the early 1990s and now lives in Canada, told Asia-Plus how he had tried to promote this idea in our country.

“During my latest trip to Tajikistan, I met in Dushanbe with a high-ranking official from the economic cluster. I explained him in detail how a cryptocurrency could be used in Tajikistan for attraction of investors and financing of the Roghun HPP,” Ahmadov said. .

According to him, a cryptocurrency could be tied conditionally to a kilowatt-hour and produce a phased limited emission.

“This idea was suggested to me by an investor who operates an investment portfolio that exceeds the budget of Tajikistan. But its [idea] future can be bright only in a free economic environment and in conditions of maximum decentralization,” Ahmadov noted.

A cryptocurrency, crypto currency or crypto is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems. When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, which serves as a public financial transaction database.

Bitcoin, first released as open-source software in 2009, is the first decentralized cryptocurrency. Since the release of bitcoin, other cryptocurrencies have been created.

In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and scrypt. This arms race for cheaper-yet-efficient machines has existed since the day the first cryptocurrency, bitcoin, was introduced in 2009. With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest large sums of money on employing multiple high performance ASICs. Thus the value of the currency obtained for finding a hash often does not justify the amount of money spent on setting up the machines, the cooling facilities to overcome the heat they produce, and the electricity required to run them. Favorite regions for mining are those with cheap electricity and/or a cold climate. As of July 2019, bitcoin's electricity consumption is estimated to about 7 gigawatts, 0.2% of the global total, or equivalent to that of Switzerland.

Cryptocurrencies are used primarily outside existing banking and governmental institutions and are exchanged over the Internet.

Tajikistan, like many other countries, has not yet decided on its attitude to cryptocurrency and has not yet adopted any laws to regulate cryptocurrency.

In 2018, the National Bank of Tajikistan (NBT) made an official statement warning citizens about the risks associated with the use of cryptocurrency. “Due to its anonymity, the cryptocurrency can be used to conduct dubious transactions, launder money and finance terrorism,” Tajik central bank noted.

The CIS member nations have different attitudes towards cryptocurrency.

Belarus, which legalized the cryptocurrency in 2017, can be considered the leader among the CIS nations in this area.

In the Russian Federation, the law on digital financial assets came into force on January 1, 2021. But the law prohibits the use of the cryptocurrency for payment of goods and services.

Uzbekistan strives to be the leader of the region in this area. In February last year, the first and still the only in Central Asia cryptocurrency exchange opened in Tashkent.

A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may accept credit card payments, wire transfers or other forms of payment in exchange for digital currencies or cryptocurrencies. A cryptocurrency exchange can be a market maker that typically takes the bid–ask spreads as a transaction commission for is service or, as a matching platform, simply charges fees.

Source: Asia-Plus