December 30, 2021
Kazakhstan, which witnessed a boom in crypto mining, is now on the verge of going bust due to electricity supply shortage, according to Nikkei Asia.
When the Chinese levied restrictions on mining, many miners migrated to energy-rich countries like Kazakhstan. At the start of 2021, the Central Asian nation was a relatively minor player on the global crypto scene. But as China moved to wipe out the industry, Kazakhstan went from accounting for 6.17% of the world’s hash rate — a measure of processing power used to mine cryptocurrency — to 18.1% by August, according to the Cambridge Centre for Alternative Finance.
On the whole, Kazakhstan has been open to digital currency mining, having established a legal framework for the industry in July 2020. But to make the most of it, the power problems need to be ironed out.
Currently there is a blame game going on between the government and the miners. “They made mining [a] scapegoat” with the result that miners are leaving the country, Didar Bekbauov, founder of local cryptocurrency mining hosting company Xive, complained on Twitter in early December. Many crypto miners reportedly are upset about the situation and have already started shutting down their operations in the country. Those that remain and the government are groping for ways to make the industry more sustainable and keep the digital currency flowing.
Source: Nikkei Asia