The history is a puzzle of twists, surprises, and controversies. Bitcoin mining has found fertile technical terrain in Post-Soviet lands. Lukashenko's fall may be the beginning of the (freedom) of the cryptocurrency boom in post-Soviet lands.
Lukashenko, Europe's last dictator is a friend of cryptocurrencies
Belarus was the first Eastern European country to adopt comprehensive legislation governing cryptocurrencies. In December of 2017, Alexander Lukashenko, Belarus President signed a Decree on the Development of Digital Economy, to facilitate any form of cryptocurrency-related activity.
Belarus offers several benefits to attract professionals from around the world, like incentive from tax breaks, state support, low cost of IT professionals, tax-free for mining and exchange operations, and simplified registration procedure. All to ensure foreign capital flow and become the mecca of crypto.
The benefits are not just for business, persons are allowed to buy, possess, mining, exchange tokens, and declaration of income from cryptocurrency is optional until January of 2023. But Belarus is not the only one, there is a cryptocurrency boom in post-Soviet lands.
When loves make a revolution
But the hot news about Belarus is not about its crypto development. Is about President Aleksandr Lukashenko, Europe's last dictator, who faces his biggest political opposition in 26 years in power, due to election fraud. On August 9, Lukashenko was elected with 80% of the vote against his rival Svetlana Tikhanovskaya, a former English teacher, who launched himself ahead of the opposition out of love after her husband was arrested by the authorities.
The election results catapulted massive demonstrations that were scolded by the KGB ―yes, Belarus is the only country in the former USSR that has not changed the name of its secret services― with more than 7,000 prisoners and hundreds of wounded. Lukashenko ran for the Kremlin, brandishing the interference of Western powers in the territory. Despite the disagreements of Russia and Belarus, Putin replied that he would be willing to offer help to solve the problems, under the Collective Security Treaty.
Cryptocurrency Boom in Post-Soviet lands
This Kremlin aid (also) can be driven by interest in cryptocurrencies. Belarus is not the only Post-Soviet territory with strong interests in the blockchain. Transnistria with Law on the development of information blockchain technologies in the Pridnestrovian Moldavian Republic. The Republic of Abkhazia with his plans to raise $1 billion in an ICO and abandon normal money in several years and Crimerin Digital Valley are examples of Post-Soviet nations seeking a position of relevance such as Silicon Farms of Mining with Russian money.
Moscow provides highly subsidized or free electricity (Belarus gets 70% of his gas from Russia, with subsidies worth around 10% of its GDP, Transnistria power plant belongs Gazprom (a Russian multinational) as well the investment in Free Economic Zone for Blockchain), while miners offer a highly efficient way to circumvent economic sanctions.
This infrastructure and context maybe can be used to guarantee for Russia, a secure global influence in the economy as blockchain usage continues to grow, perhaps comparable to the actual place the US holds in the traditional banking (in erosion) system. With the marginal vantage to be a hoard of a capital difficult to control and trace. Cryptocurrencies can offer Russia a way to circumvent United States sanctions that are violating its real-world currency - and its breakaway regions have everything they need to exploit them.
Russia’s huge energy reserves and a ready-made network of underused power plants is the equivalent of a blank check. The old privileged situation of the US may have blinded him. Inversely, the suffocating situation of the post-Soviet countries makes them aware of crypto opportunities.
Freedom in half is no freedom
Ok, the USA sanctions regime may be empowering a new crypto order. But to be free of United States sanctions and dependent on Russian sanctions is switch dirty to badly washed. Freedom in half is no freedom.
In 2004, Russia cut all Belarus gas for 30 hours to force a purchase from Beltransgaz (the acquisition ended up only 7 years later, in 2011). In 2016, Russia raised gas prices in retaliation for Belarus's growing ties with the EU. The development of the cryptocurrency market in Soviet unrecognized lands is being driven by Russian investments and interests. Technologies are apolitical in practice, regardless of the reason why they were created.
But the fall of Lukashenko could be the beginning of a new wave of freedom from Post-Soviet blockchain centers. The people of Belarus have the right to decide their future, without outside interference or from leaders who are recognized only while calling on the KGB. And I hope that this fall will be the beginning of the crypto Boom and the freedom of Transnistria, Crimea, and Abkhazia.
Acknowledgments: I would like to thank Laura Pappalardo and Paula Maria for introducing me to the issue of mining in Transnistria. Without this, I would not have had any ability to write that text.