• About
  • Advertise
  • Careers
  • Write for us
  • Contact
  • Terms of service
Sunday, May 29, 2022
The Millennial Source
TMS
Home WORLD

What you need to know about the crypto mining trend in Kazakhstan

byJake Shropshire
February 21, 2022
in WORLD
crypto in Kazakhstan

FILE PHOTO: A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. REUTERS/Edgar Su

Share on FacebookShare on TwitterShare on Linkedin
From August 2020 to August 2021, Kazakhstan’s share of the global bitcoin hash rate (e.g., its share of global bitcoin production) went up from 4.6% to 18.1%.

There’s crypto activity in Kazakhstan?

  • Yep, that country you haven’t thought about since the last Borat movie came out is a pretty big deal when it comes to cryptocurrency. 
  • From August 2020 to August 2021, Kazakhstan’s share of the global bitcoin hash rate (e.g., its share of global bitcoin production) went up from 4.6% to 18.1%.
crypto mining in Kazakhstan
Source: ccaf.io
  • A lot of this move seems to have been from China, where the mining and use of crypto have become illegal over the course of the past year. 
  • Much of this move has come from major mining companies, such as Canaan, a crypto mining hardware manufacturer that has expanded its growth in Kazakhstan. 
  • And Kazakhstan, for its part, embraced the crypto miners with regulations that make the country seem hospitable to them. 

So is Kazakhstan winning from all of this?

  • Not so much. In theory, the country would be bringing in some money, especially with some of the taxes placed on the mining companies moving there from China. 
  • However, the amount of crypto mining that moved to Kazakhstan represents massive energy usage – far more than the country was prepared to provide. 
  • In 2021, the country’s total energy usage went up by 7%, mostly attributed to the arrival of crypto mining companies and their data centers. 
  • This sudden increase in power usage meant that the nation began to see power shortages, amounting to more than 7% in the first three quarters of last year. 
  • The problem didn’t get much better, and in late January of this year, the Kazakh government shut off power to crypto mining data centers. 
  • And if you’re wondering if that would have cost the government a lot of money, it’s hard to say because crypto can easily be mined in one jurisdiction and sold in another, bringing very little, if any, money to the country it’s mined in. 

How are the mining companies responding?

  • Well, some are just leaving the country for somewhere energy shortages won’t be such a problem. 
  • The most recent example of this was BIT. This Hong Kong-based crypto mining company announced in its quarterly earnings report on February 17 that it was canceling a US$10 million data center construction project in Kazakhstan. 
  • But they’ve also pushed back on the idea that they caused the problem in the first place, placing the blame instead on illegal mining farms, also known as “gray mining.”
  • It isn’t clear how much of the problem was caused by gray mining and how much of it was caused by legitimate legal mining projects. 
  • These mining companies and their advocates have also said that the government response to the power shortages has been insufficient.

What’s next?

  • Well, many of these mining companies are moving out of Asia for good now, finding their home in Europe or overseas in North America. 
  • But, this isn’t necessarily the perfect solution either since more crypto regulation in the United States, for example, is being worked on right now. 
  • But the crypto world runs on electricity, and without it, the companies are dead in the water. And, it doesn’t seem likely that crypto will have the same effects on the US power grid that it did on the Kazakh grid.
  • During the deficits, Russia, the primary energy source in Kazakhstan, has said that the Kazakh power grid is outdated and needs an update. 
  • Ultimately, though, the great crypto migration isn’t over yet, and it doesn’t seem like it will be anytime soon. 


You drive the stories at TMS. DM us which headline you want us to explain, or email us.

Like TMS? Subscribe to our free daily newsletter

. . .

Related

Tags: Cryptocurrencies
ShareTweetShare

Latest Posts

stablecoin

What you need to know about Terra’s UST crash 

May 12, 2022
Shares tumble

Wall Street shares tumble while Bitcoin value drops amid market uncertainty 

May 10, 2022
Crypto

Coinbase CEO bets that there will be 1 billion crypto users in a decade

May 6, 2022

Asia’s First NFT Index, RHNI, launches in Hong Kong to provide investors with a benchmark of the evolving NFT world

May 3, 2022

Yuga Labs, the creators behind Bored Ape Yacht Club issues an apology after disrupting the entire Ethereum blockchain

May 3, 2022

Some crypto traders are admitting themselves into rehab

April 25, 2022

Investors like Justin Bieber and Gwyneth Paltrow pile into crypto startup Moonpay

April 13, 2022

Hong Kong’s ex-Finance Chief John Tsang joins StashAway; offers NFTs in bid to attract new clients

April 11, 2022

A private island sells in the metaverse for US$398,685

March 24, 2022

SUBSCRIBE TO THE TMS NEWSLETTER

By providing your email, you agree to our Privacy Policy

The Millennial Source Ltd. 2021

No Result
View All Result
  • Your daily briefing
  • About us
  • Explore
    • Startups
    • Climate change
    • Tech giants
    • Crypto
    • The future of work
    • Banking giants
    • Economy
  • Lifestyle
  • TMS archives
  • Write for us
  • Contact
  • Privacy Policy & Terms

© 2022 The Millennial Source Ltd.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in settings.

 

Loading Comments...
 

    string(24) "jsonld single post debug"
    The Millennial Source
    Powered by  GDPR Cookie Compliance
    Privacy Overview

    This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

    Strictly Necessary Cookies

    Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

    If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.