Saturday, April 13, 2024

Cryptocurrency mining triggers energy crisis in Kazakhstan

Crypto mining firms have left Kazakhstan grappling in the dark as the country comes to terms with the energy crisis. Cryptocurrency mining, especially bitcoin, consumes huge amounts of energy. Kazakhstan’s Ministry of Energy, as per reports, revealed that demand for electricity spiked by 8% in 2021. This has been attributed to unregistered crypto miners who illegally mine the cryptocurrencies at factories or their homes. A Reuters report highlighted the ministry saying that grey mining may be consuming up to 1.2 GWt of power, which together with white miners makes it about 8% of Kazakhstan’s total generation capacity. To address the energy crisis in the country, the government plans to charge crypto miners.

According to Eurasianet, central Asian nation has three electricity grids – the northern grid produces a surplus, the western grid is regarded as less self-sufficient and the south is a deficit. There are inefficiencies in transfers from the north to the south. Moreover, alarms have been raised that Kazakhastan has turned to coal to meet the growing energy demands.

Eric Livny, regional economist, European Bank for Reconstruction and Development, said there is a heavy reliance on coal in Kazakhstan. “But this creates very big problems in meeting the obligations that Kazakhastan has taken on with regards to making the economy greener.” Environmentalists believe there is an impending crackdown on the crypto mining industry in the country. In the meantime, there are reports that Kazakhastan has turned to Russia for the much-needed electricity. And the government is set to charge crypto miners a fee of 1 tenge for every kilowatt per hour usage from 2022.

However, a blockchain expert Yedige Davletgaliyev, an engineer at Blockchair believes Kazakhstan has an opportunity to develop its weak electric power sector. According to the Cambridge Centre for Alternative Finance, Kazakhstan is second only behind the United States in global bitcoin mining. Crypto miners turned to this central Asian country after China cracked its whip on the cryptocurrency industry.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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