Kazakhstan has become the second most important territory in the world in cryptocurrency mining, representing just over 18.1% in bitcoin production, a significant figure (for August) if we compare it with 8% last month of April. The Central Asian country, which has 18.75 million inhabitants, is only behind the United States, the absolute leader after taking over from China last October.
The United States climbed to the top of the mining podium, thanks to China’s battle with this practice for several months. The Asian giant included this mining process in which investment by Chinese and foreign users is restricted or prohibited, causing many of these companies, approximately 50, to be forced to leave the country for Kazakhstan.
Currently, the Kazakh country has the second largest cryptocurrency mine in the world, located in the city of Ekibastuz, in the northwest of the country. In it, the ‘roars’ of thousands of powerful computers are heard 24 hours a day in 12-hour shifts for the 150 people who work there. An investment of 300 million dollars with the aim of mining cryptocurrencies. “The sound of the machines in operation excites me because it is the sound of money, digital money,” says Yerbolsyn, owner of the installation, in a statement to the BBC.
All this consumption has put the Kazakh government on alert, which explains that in just one year mining contributed to an increase of between 7% and 8% of the electricity used throughout the country. The amount of electricity that goes into mining in Kazakhstan is now equivalent to that needed to keep the lights on in a big city. “Electricity is not infinite in Kazakhstan, so we can say that at a certain volume of mining we are going to stop,” reports the country’s Deputy Minister of Digital Development.
The cuts of all communications caused much of the crash of bitcoin
However, social tensions against the country’s government in recent weeks, motivated in large part by high fuel prices that have risen to historic prices, have caused the country to cut off all communications, including the Internet. . The domino effect reached bitcoin miners who, logically, were left unable to operate, causing 15% of them to be offline, a main reason why bitcoin plummeted to $40,000 (at $37,800 as of the date of publication). this Friday).
These bans should have ended on January 31st. However, from the Asian country they have decided to extend these power cuts until February 7. The miners will not have it easy since, in addition, the Kazakh legislators are weighing the creation of a law that introduces new taxes to these cryptocurrency workers during this year, something that could cause an exodus of these people to other areas.
“Like we saw with China, when a country proves to be unstable for bitcoin mining, miners from that country end up moving to more favorable jurisdictions, making outages less and less frequent. That’s how the bitcoin network it gets tougher over time,” bitcoin mining engineer Brandon Arvanaghi told CNBC.