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- Kazakhstan, one of the world’s Bitcoin mining hotspots, may cut down on Bitcoin mining due to blackouts.
- The nation is one of the largest energy producers, however, its energy sources are 87 percent carbon-related.
Kazakhstan, one of the top crypto mining hubs in the world, may limit Bitcoin (BTC) mining operations following power shortages. Miners are now wary of their operations being shut down especially during the winter season when power production lowers. Wu Blockchain tweeted;
Miner said that Kazakhstan may restrict Bitcoin miners due to power shortages. Some miners also said that the lack of electricity in winter is normal in Kazakhstan, and miners should consider this before constructing,
Notably, Bitcoin miners flocked to the third-world nation during China’s sweeping crackdown on cryptocurrencies and mining plants. Kazakhstan’s electricity rates are among the cheapest in the world, at around $0.032/kWh. The transcontinental nation is also in a strategic position between Europe and Asia. These were among the attributes attracting Chinese BTC miners’ migration to Kazakhstan.
Additionally, the country’s climate is ideal for Bitcoin mining and there are low real-estate costs at $5000/acre. Kazakhstan’s government has also invested nearly $180 million to build energy sources.
Kazakhstan and Bitcoin mining
Before 2019, the nation’s government had controversial opinions on cryptocurrencies. This soon changed after considering the economic benefits of the same. In 2019, the country held 6th position worldwide in terms of hash power. It has now been catapulted to the fourth-best mining destination globally, according to techunwrapped.com. Large companies such as Canaan and BIT Mining LTD, which are publicly listed, lead Kazakhstan’s BTC mining operations.
Nevertheless, Kazakhstan’s electricity is extremely carbonaceous, according to the International Trade Administration. 87 percent comes from fossil fuels, especially coal, and hydropower accounts for 12 percent. Solar and wind installations account for less than one percent. The surge in crypto mining operations has, therefore, raised numerous concerns from environmentalists.
Statistics show that Kazakhstan’s energy production covers more than twice its energy demand, making it a major energy exporter. However, the proliferation of Bitcoin miners might overwhelm energy sources. Didar Bekbau, co-founder of xive.io integrated Bitcoin mining platform says the southern region faces a higher risk of “harsh electricity limits” for mining.
BTC’s energy hunger
Of note, Iraq legalized Bitcoin mining in 2019 but had to suspend the same in May 2021, following city blackouts. Iran officials blamed the surge in cryptocurrency mining on increased manufacturing and a drop in hydropower supply. At the time, the nation accounted for 4.5 percent of the world’s Bitcoin mining. Nevertheless, the nation plans to reinstate crypto mining operations in the country soon.
Many more countries, such as El Salvador and Belarus continue to encourage Bitcoin mining operations. However, it is obvious that if these remain unchecked, Bitcoin’s energy hunger may overload a country’s production capacities. Kazakhstan miners now wait to see what actions the government might take and what their fate will be.
At writing time, BTC was trading at $44,846, up 1.5 percent in the past 24 hours.
