In the early months, Kazakhstan’s crypto mining commerce was bolstered by China’s narrowing hold on digital asset guidelines. Seven months later, it’s developing that Kazakh-based crypto miners are tired of dealing with electricity shortages. Some miners declared bankruptcy because of the country grid’s inability to provide consistent power. Just when it seemed like the country was becoming a global crypto mining center, it seemed like everything was heading south for miners.
Kazakhstan benefited from China’s crypto ban
In May, China initially barred financial institutions and banks that dealt with crypto transactions. In the ensuing months, Chinese regulators became increasingly tough on the subject. Then in September, the People’s Bank of China published a statement stating that all crypto activities were now considered illegal. In response, many people tried to circumvent the rules by turning to P2P and DEXes exchanges. Some individuals continued to access cryptocurrency through their VPNs.
As a result, the People’s Bank of China started to target loopholes. They went as far as calling overseas exchanges “illegal”. According to them, it is justified because digital currency jeopardizes the safety of people’s financial assets. This led to an immense slowdown of crypto mining in China, bringing down the hashrate.
According to data collected from Cambridge Bitcoin Electricity Consumption Index, there was a massive reduction in the Bitcoin hashrate in the People’s Republic in May. While all this was occurring, Kazakhstan’s hashrate jumped from 11.9Eh/s to 21.9Eh/s in the months of May through August.
Electricity shortage faced by Kazakh miners
Unfortunately, Kazakhstan is equipped with an electricity infrastructure that is not up to modern standards. As quickly as the crypto mining industry took off in the country, their aging electricity grid couldn’t keep up with the strain. Residents faced numerous power cuts. In response, the country’s electricity operating company enforced forced cuts to the supply, citing unscheduled repairs.