Author: Emil Lazarian
Armenia aims to position itself as a Bitcoin mining hub
The post-Soviet republic took a friendly stance on crypto, but heavily relies on foreign energy.
At the end of August, a digital platform called ECOS Free Economic Zone delivered good news from a country that rarely sparks on the global crypto map — Armenia. ECOS reported adding 60 megawatts (MW) of capacity to its power plant-based facility, operating since 2018.
Situated at one of the hydroelectric plants on the Hrazdan river, the mining facility gets its electricity supply directly from the high-voltage grid and uses the site’s infrastructure to power containers. The platform’s representatives noted that ECOS could expand to an additional 200MW of clean electricity. For comparison, the Berlin Geothermal plant in El Salvador gives away 1.5MW of the 102MW it produces to crypto miners, while the Greenidge Generation near the shore of Seneca Lake in the State of New York should have produced about 44MW.
Given the controversial developments with crypto mining regulation in the Commonwealth of Independent States (CIS) region — countries of the former Soviet Union — perhaps it is high time to assess the industrial potential of this post-Soviet republic, towering 1,850 meters above sea level.
The most certain fact about Armenia regarding crypto is that we don’t get much information from the country. In 2018, the Armenian Blockchain Association joined its counterparts from Switzerland, Kazakhstan, Russia, China and South Korea in filing a joint lawsuit against tech goliaths such as Google, Twitter and Facebook for banning crypto-related advertising. The lawsuit’s further destiny is unclear, though the restrictions on crypto ads have been uplifted at least to some extent in recent years.
The same year, Prime Minister Nikol Pashinyan and other top officials reportedly attended the opening ceremony of a new mining farm touting itself as one of the world’s largest. By local media estimates, around $50 million had been invested in the creation of the farm with 3,000 Bitcoin (BTC) and Ether (ETH) mining machines and a planned capacity of 120,000 in the future. The farm is a joint venture by major Armenian conglomerate Multi Group, founded by businessman and politician Gagik Tsarukyan and controversial international mining firm Omnia Tech. No updates about the work of the farm have hit the media radar since the very opening press releases.
Perhaps the most important and publicly visible development from the country of three million was the failure of efforts to form a shared stance regarding cryptocurrency regulations by the Eurasian Economic Union (EAEU). In 2021, a high official from EAEU revealed that member states did not support a recent initiative for a uniform cryptocurrency regulatory framework within the union. While no insights on what exact members sabotaged a project are available, the failure itself will have a long-lasting impact on the whole region, as the EAEU includes not only Armenia and Belarus but also such mining heavyweights as Russia and Kazakhstan.
While there are no traces of the existing legislative framework on crypto in the country (and no prohibition as well), Armenia stepped on its regulatory path back in 2017 by forming a committee on blockchain technologies.
In 2018, the local Ministry of Finance launched a working group called JAF Crypto Market Intelligence Unit (JAF CMIU), whose task was to study possible regulatory scenarios. That same year, a special Free Economic Zone (ECOS) was established by the government decree to help attract and develop blockchain and crypto startups.
The potential residents of the 2.2-hectares ECOS are granted the financial benefits of zero value-added tax (VAT), the absence of import and export duties and no tax burden on property and real estate. As the official page goes, the ECOS also offers multifunctional workspaces, a research and development center, acceleration programs and the infrastructure comprised of a power plant, data center and mining farm with Bitmain equipment. The only tax to which the zone residents are subject is a monthly payment of income tax for employees.
The mining capacities of the free economic zone are secured by the electricity from the Hrazdan Thermal Power Plant, situated in a mountainous region of Armenia with a low average annual temperature, making it advantageous for cutting cooling costs.
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Speaking to Cointelegraph, ECOS marketing manager Anna Komashko cites the latter fact as a serious advantage, nodding to the recent problems for miners in Texas after a scorching heatwave in the Southern state. As she specifies, currently 60% of the Armenian facility’s 260,000 users are from the United States and Europe.
Armenia posseses at least two large mining facilities, one of them marketing itself as state-of-the-art. The country’s government also seems moderately friendly toward crypto, albeit without any concrete legislation being considered. But is this enough to consider the nation particularly attractive for investments?
Perhaps such broad factors as the country’s ascendance in transparent governance ratings, the large intake of IT specialists who’ve left Russia, and the natural leaning to attract the high-tech and service businesses in the absence of significant hard industry could also work in Armenia’s favor.
But, with crypto mining, the decisive importance still lies in the realm of the material, i.e., the overall energy profile of the country.
Data from a 2021 study by the DEKIS Research group at the University of Avila ranks Armenia 56th in the global crypto mining potential ranking. The position itself isn’t too low — for example, with all its gargantuan ambitions, El Salvador occupies only line number 73. Kazakhstan, which for a short period became the prime spot for Chinese miners, sits at 66th, and Iran ranks 115th.
But more interestingly, by its potential, Armenia outranks neighboring Georgia (83th), which has established itself as a mining hub and by 2018 ranked second around the globe in Bitcoin (BTC) mining profitability.
However, one might question the DEKIS report itself as, according to its data, both mountainous countries possess near to zero amount of renewable energy (0% in the case of Georgia, 0.1% in Armenia, to be precise). Speaking to Cointelegraph, Arcane Research analyst Jaran Mellerud recited remarkably different figures:
“In Georgia, 75% of the electricity is generated by hydropower, while this number is only 31% in Armenia.”
These numbers, Mellerud believes, make a difference for potential miners who naturally seek cheaper energy. While hydropower has almost zero marginal production cost, natural gas and nuclear power — which still form a total majority of power supply in Armenia — are way less convenient for collateral use. After all, Mellerud can’t consider the country as an especially attractive direction for foreign mining due to local prices:
“The problem is high electricity prices, especially now when natural gas prices are going through the roof, and a significant share of Armenia's electricity is generated by natural gas. I was in Georgia this summer, and even there, miners are leaving the country.”
By 2021, the price per kilowatt hour (KWh) of energy in Armenia amounted to $0.077, which was relatively lower than in developed markets (take an example $0.372 in Germany or even $0.15 in the United States), but still higher than in Kazakhstan ($0.041), Uzbekistan ($0.028) or Iran ($0.005). With the inflation of global energy prices, the numbers may change significantly, but it hardly would lead to significantly different outcomes.
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According to the country’s profile from International Energy Agency (IEA), Armenia is heavily dependent on Russia in terms of its consumption, importing around 85% of its gas and all of its nuclear fuel from there. All in all, it relies on fuel imports from one country to produce nearly 70% of its electricity, “raising concerns about the diversity of supply.”
As a report from OCCRP suggests, even the rising amount of small hydroelectric plants provided only 9% of consumed energy by 2013, with environmental scientists raising concerns about these plants endangering local rivers’ water balance.
Serzh Sargsyan: Menaces for Artsakh and Armenia to become more gruesome by day
The message of Serzh Sargsyan on the occasion of the Day of Republic of Artsakh runs as follows:
“Today there will be no traditional congratulations, festive fireworks or expected joy in Artsakh as it used to be for many years in the past because Artsakh’s independence is imperiled. Artsakh, which for three decades was safeguarded and cherished through the efforts of the entire Armenian nation, has suffered a treacherous heavy blow from behind, and now a considerable part of the victorious, independent, dignified and advancing Republic’s territory has been handed to the enemy.
And as long as the traitorous peace-lovers open our doors for the enemy and do it on behalf of the people in Armenia and Artsakh and make deals behind the back of that very people, conduct negotiations and represent our country, menaces for Artsakh and Armenia, which once was the guarantor of Artsakh’s security, will become more gruesome by day.
Only the removal of those who undermine our state and jeopardize the very existence of our nation can give us a chance to extract the country from this perilous situation, can allow to conduct negotiations with dignity and normalize the relations with the partners. The inability to comprehend this simple truth will be critical for the Republic of Artsakh and Republic of Armenia alike.
Based on this premise, our political team and I personally, our supports and partners have been and will continue to fight against our internal and external enemies.
To be able to celebrate Independence Day again, we must first and foremost erase indifference inside us, erase fear and despair; we must trust our abilities again, we must awake the freedom loving Armenian spirit, we must join the common struggle, we must become a fist again and must defend our right to live in freedom and independence.”
Armenian Universities’ Lost Applicants
Thousands of places remain vacant as students fail entry tests due to low quality education and fewer applicants.
When she sat her entry exam at university, Sirush Isayan felt unprepared.
“Our school does not have good teachers in foreign languages and mathematics, I didn't get a good understanding of those subjects. I studied on my own, but it was not enough,” Isayan told IWPR.
Isayan, who hails from the village of Svarants in Armenia’s southern Syunik region, failed the exam. She joined the ranks of thousands of recent high school graduates whose results fell short of the threshold needed to enter university.
In 2022, Armenia recorded unprecedentedly poor results in university admissions: 25 per cent of the 1,918 government-funded places remained vacant, while out of 21,761 self-funded places, 15,243 were left unfilled.
“The situation is the result of a low number of graduates and the poor education public schools provide,” Atom Mkhitaryan, dean of the scientific and education centre of the National Academy of Sciences, told IWPR.
Armenia’s troubled demography is affecting universities as there are fewer graduates than the available government-subsidised places. For many, the obstacle is money.
Armenia’s higher education system is highly centralised. The country has 55 higher education institutions, including 26 state universities, which are almost all located in the capital Yerevan.
Tuition fees range from 400,000 to one million drams (990 to 2,480 US dollars) and renting an apartment in Yerevan starts at a minimum of 150,000 drams (370 dollars). The average salary in Armenia is 180,000-200,000 drams (between 445 and 495 dollars).
“For people from the villages, studying at the university in Yerevan is a challenge. Few can afford the tuition fees and renting costs without interrupting their daily classes. For those who make it, a degree is earned at a very high price, both financial and personal,” 23-year-old former student Asya Garselyan told IWPR.
Garselyan’s parents worked in agriculture in their native village of Bavra, in the north-western region of Shirak, and decided to move to the capital to find better paid jobs to support their daughter’s dream of going to university.
“I worked two years as a waitress in a café to save and pay for my education. It was exhausting,” she recalled. Then in 2018 she applied and entered the Yerevan State University of Languages.
When the Covid pandemic hit, the café closed and she eventually found a job in the IT sector. But by the time she was in her third year, Garselyan could not make end meet. She eventually dropped out.
In 2020, 781 students were expelled from university for failing to pay the fees; in 2019 the figure was 962 and in 2018, 365.
In July 2018, prime minister Nikol Pashinyan stated that “no student should be expelled from the university for being unable to pay tuition fees .
“The prime minister’s statement is just words,” Mkhitaryan said. “Many students drop their higher education primarily because of tuition fees and various associated costs. But if they are expelled after being admitted, what mechanisms do we have to avoid it?”
The education state policy and system need to be revised, he noted, as “the ongoing so-called reforms have zero and sometimes even negative results”.
There are other factors. The economic contraction of 2020, due to the pandemic and the war against Azerbaijan over Nagorny Karabakh, resulted in young people turning to jobs that required no university qualifications, while high-achieving students applied for scholarships to study abroad.
The mismatch between what universities offer and what the labour market needs adds a layer of inefficiency.
“In the planned economy of the Soviet era, the state knew exactly how many specialists it would need in the specific sectors every year and planned the distribution of places accordingly,” Mkhitaryan explained, adding that today the government’s approach is shrouded in confusion.
Experts maintain that, to bear fruit, education reform should also include better conditions, professional development and salaries for education professionals.
Universities must adjust their curricula to current economic relations and offer competitive short-term programmes and training.
In May, the World Bank announced a 25 million-dollar loan to the government for additional financing of the country’s Education Improvement Project (EIP), which includes quality and relevance in higher education institutions.
The World Bank indicated that quality of education is a key challenge “causing a mismatch between the formal qualifications of graduates and the skills sought by employers, slowing overall productivity, and hampering economic growth in Armenia”.
Sciences are particularly hit by low number of applicants, with subjects like chemistry, geology and agriculture attracting close to no applicants. This results in an aging scientific community: data from the statistical committee of Armenia showed that in 2020 more than half of the country’s scientists were over 50 years-old and mostly male.
Upgrading the system to international standards will be a long-term effort.
The Armenian National Agrarian University had the lowest admissions in 2022, with only 40 places filled out of 1,000 available. The institution, one of the country’s oldest, is failing to attract applicants despite efforts to modernise, for example creating about 40 laboratories and research units.
“On the one hand, the government says that agriculture is one of the priority sectors of our economy, but on the other, it does not implement an adequate policy on providing the education in the agricultural sector,” Sos Avetisyan, head of the institution’s PR department, told IWPR.
“Some school teachers lack the required knowledge. It is not a coincidence that Yerevan State Pedagogical University ranks second after us with a low number of first year students. People don't want to become teachers. This is a serious problem, a nationwide issue.”
On July 28, the government approved the draft law on developing state education until 2030. The deputy minister of education Artur Martirosyan stated that by 2030, “90 per cent of graduates will work according to their profession after graduating from school, college or university”.
“Providing targeted state support to specific Armenian universities will create an opportunity to significantly improve our position internationally and include four Armenian universities in the list of the top 500 international rankings,” Martirosyan said during the cabinet session.
Mkhitaryan does not share this optimism.
“At this rate, we may even lose what we have. It is simply unwise to say that by 2030 four Armenian universities will be included in the world's top universities. First of all, it involves huge financial investments and students, including international, as well as the integration of research work into the educational process, which we do not have at all,” he told IWPR, adding that none of the current cabinet members will be in the government in 2030, so no one will bear any responsibility for the programme’s failure.
https://iwpr.net/global-voices/armenian-universities-lost-applicants
Artsakh should always stand firm, be Armenian, and continue the path to independence – President
Artsakh should always stand firm, be Armenian, and continue its path towards independence, Artsakh’s President Arayik Harutyunyan said on the 31st anniversary of proclamation of the Republic of Artsakh.
He noted that even 31 years later, the people of Artsakh firmly and decisively declare that, despite all the tests of time, they are faithful to their decision, they are faithful to their chosen path, which is irreversible and consistent.
Below is the full text of the statement:
September 2 of 1991 took its place in the Armenian history as a momentous and decisive day. The joint session of the Councils of People’s Deputies of the Nagorno-Karabakh Autonomous District and Shahumyan Region adopted the Declaration of Independence of the Republic of Artsakh, announcing to the world the formation of the second Armenian republic. The moment was historic, the decision of the people to live freely and independently was unviolable, the will – unshakeable, the spirit – invincible.
However, our way to building a democratic state complying to the norms and standards of the international law was full of indescribable hardships and trials.
The 44-day hostilities of 2020 became a new disaster for the Armenian people, taking the lives of thousands of our brave sons away and mutilating numerous destinies. We are grateful to all the martyrs who sacrificed their lives for the independence of the Motherland and the dignified existence of the Armenian people. We bow our heads to their bright memory and proud relatives.
Today the communication with Mother Armenia is conducted via a new route of the “Lachin Corridor”, the security of which is ensured by the peacekeeping forces of the Russian Federation together with the relevant structures of our Republic.
We are deeply grateful to all our compatriots living in Armenia and the Diaspora for constant support, we are grateful to the Russian Federation for the mission undertaken in Artsakh, we are also grateful to all those states, politicians and public figures who have been by our side all these years, remaining faithful to the universal values of justice, humanity, and democracy.
Even 31 years later, the people of Artsakh firmly and decisively declare that, despite all the tests of time, they are faithful to their decision, they are faithful to their chosen path, which is irreversible and consistent. Artsakh should always stand firm, be Armenian, and continue its path towards independence.
Artsakh’s destiny is in our hands – Hayastan bloc
The opposition Hayastan alliance issued a message on the Artsakh (Nagorno-Karabakh) Independence Day marked on September 2.
On 2 September 1991, the people of Artsakh declared independence from the Soviet Union and became the Nagorno-Karabakh Republic (NKR).
“The Republic of Artsakh with its constitutional relations, well-established state institutions, educational and cultural institutions and economic capabilities was built over years of persistent and hard work, sacrifices and courage, as well as the selfless devotion of Artsakh Armenians to the idea of independence,” the bloc said in its message.
“Artsakh was getting stronger day by day, being convinced that it was part of the security, spiritual and economic system of Mother Armenia. Alas, the dangerous, reckless and anti-national policy pursued by the incumbent Armenian authorities dealt a devastating blow to the unbreakable Armenia-Artsakh unity, putting the two states at serious risk.
“Nevertheless, no matter how severe the consequences of the 44-day war imposed on us are, Artsakh’s destiny is in the hands of us all. Defeat is not a verdict.
“Independence and dignity are earned by those nations that do not give up on their dreams, that know how to defend their rights and appreciate their homeland,” reads the message.
Artsakh has to get strong, ex-ombudsman says on Independence Day
Armenia’s former Human Rights Defender (Ombudsman) Arman Tatoyan issued a congratulatory message on the 31st anniversary of Artsakh's independence marked on September 2.
“The struggle for the independence of Artsakh is aimed at defending our dignity, rights and safety. 11 years ago on this day, the independence of Artsakh was proclaimed to ensure it.
I have repeatedly provided evidence that Azerbaijan has pursued and continues to pursue an actual genocidal policy against Artsakh and Armenia, which is marked by state-sponsored hatred, hostility, encouraged and unpunished crimes affecting Armenians from around the world. This requires the existence of a statehood independent from Azerbaijan as a guarantee for the protection of the indigenous Artsakh people, the Armenians.
For the sake of the blood split by our heroes, safety and rights of our children, we should not stop defending the rights of Artsakh Armenians.
We must believe in ourselves and not allow the destructive feeling of inability to fight and incompetence to be instilled in us.
Artsakh has to get strong," reads the message.
Businessman Ruben Vardanyan Renounces Russian Citizenship, Says Will Move to Artsakh
Businessman Ruben Vardanyan
Businessman and philanthropist Ruben Vardanyan on Thursday announced that he is renouncing his Russian citizenship and relocating to Artsakh.
Vardanyan, who has various business interests in Armenia and Russia, is the founder of, among other organizations, the UWC Dilijan College, the IDea Foundation, which was pivotal in revitalizing the Tatev Monastery and building the world’s longest tramway, the Foundation of Armenian Science and Technology, as well as the Aurora Project.
“I made a decision to move to Artsakh. Today, the people of Artsakh are experiencing a severe psychological crisis with no confidence in the future. Residents of Artsakh, who have survived two wars and lost their relatives and loved ones in the struggle for independence, feel abandoned, forgotten and ignored. I believe that after the 2020 war, we, Armenians around the world, have an obligation to stand together with the people of Artsakh. We must not just support them symbolically, but help them through concrete work. Artsakh is the center of the Armenian nation that has always been a place of true strength for us and we cannot let everything that was created by our ancestors over the millennia fall into oblivion,” Vardanyan said in announcing his decision to move to Artsakh and renouncing his Russian citizenship.
Vardanyan said that his decision “was not easy” for him but he is sure that it is the right thing to do and he hopes that his Russian partners and friends will accept this decision “with understanding and respect as a decision of their friend.”
Vardanyan thanked Russia for deployment of peacekeeping troops to Artsakh to protect its population.
“I believe that the mandate of the peacekeepers should be clarified and the terms of their stay should be extended until we can ensure the security of the people of Artsakh by our own forces,” he said.
Vardanyan also addressed Armenia’s neighbors, who often use aggressive rhetoric.
“I want to say: stop pushing our buttons. This is a dangerous and a short sighted approach. The force used will one day boomerang. You must understand that we, Armenians, will not allow ethnic cleansing in Artsakh. We will not allow you to gradually push Armenians out of Artsakh. This is impossible because this is the historical homeland of Armenians, the cradle of Armenian identity,” he stressed.
He thanked the French and U.S. Ambassadors to Azerbaijan for refusing to visit Shushi and Hadrut and clearly stated that the status of this territory has not been determined. Vardanyan said he believes that only the international community, which should include the people of Artsakh, Russia, France and the U.S., can together decide on the future status of Artsakh.
Vardanyan also addressed to the world community. “Today there are conflicts everywhere in the world… However, what is happening in Artsakh concerns everyone, because it is not just an ancient land with an ancient people, it is one of the cradles of human civilization—one of the cradles of Christianity. And the cultural and ethnic cleansing of Artsakh is impossible and unthinkable,” he stressed.
Addressing his fellow Armenians, Vardanyan said that he situation is almost the same as 100 years ago, “when Armenians, gathering forces, not having arms, created a miracle, stopping the enemy (the advancing Turkish army) in Sardarabad.”
“Sardarabad was not just a battle. It is a symbol of our nation’s rebirth and the ability to defend itself in the hardest and most critical moment. Now is the existential Sardarabad moment for all Armenians. The new Sardarabad! It is not a battle, it is invisible and not felt, like radiation, and therefore it seems that nothing happens. In fact, radiation is destroying all life. We must wake up. Each of us must do his or her best to stop the catastrophe that will be fatal for everyone, irrespective of where we live,” Vardanyan said.
He said that he made the decision to move to Artsakh to lead by example.
“Together we should create a concrete plan for Artsakh’s development and make it a reality, implementing it systematically and professionally. Otherwise, we will lose what is the backbone of our nation. We have to do everything to make Artsakh strong, secure, developed and happy and make it one of the centers of the world and the Armenian nation. Furthermore, I am confident that together we will succeed. I am confident that we have all opportunities, all resources, because we, Armenians, can do it,” Vardanyan emphasized.
Ruben Vardanyan on reasons for moving to Karabakh: I am ready to sacrifice everything
I am Armenian and I am a patriot. I have done everything for my country and people. Ruben Vardanyan—a Russian Armenian businessman, entrepreneur, and co-founder of the Aurora Humanitarian Initiative—told this to a press conference in the Artsakh (Nagorno-Karabakh) capital Stepanakert on Friday.
Vardanyan denied the rumors being circulated about him, especially regarding his sudden moving to Karabakh. Accordingly, some believe that Vardanyan has renounced his Russian citizenship and announced his moving to Nagorno-Karabakh solely for gaining profit.
"I have developed projects, made investments, and all of that—for Armenia to be a strong, happy, and independent country; that was the basis of my activity," assured the businessman.
According to Vardanyan, he has found his “place” and is now ready to sacrifice everything.
Oppositionist names three principled demands on Karabakh, which must be secured
There are only three principled demands on Karabakh, which must be secured, said Ishkhan Saghatelyan, a representative of the Supreme Body of ARF Dashnaktsutyun and an MP from the opposition "Armenia" bloc, during the September 2 rally of the Resistance Movement on the French Square in the center of Yerevan (PHOTOS).
The Karabakh issue, he said, has existential significance for Armenia.
"Karabakh is our strength and our dignity. It can never become an object of bargaining. Nevertheless, Karabakh today is on the brink of an abyss. It is threatened by ethnic cleansing and expulsions of Armenians," the oppositionist said.
He also listed the previously mentioned three main demands:
1. Any solution by which Karabakh can be incorporated into Azerbaijan must be excluded.
2. The enclave state of Karabakh should be excluded. That is, a reliable land connection must be established between Karabakh and Armenia.
3. Karabakh's demilitarization should be excluded. That is, the Armed Forces of Armenia and Karabakh should participate in the creation of a unified security system.
The obligatory provision and subsequent implementation of these three requirements, according to Saghatelyan, can prevent attempts to evict Armenians from Karabakh.
"For all these three requirements, we have problems. But we, for the realization of these goals, will fight to the end!" the parliamentarian stressed.