Sunday, May 26, 2024

Kazakhstan’s Chaos Adds Onto Bitcoin’s Distress

The civil unrest in Kazakhstan and internet blackout have dealt another blow to bitcoin’s mining hub. Crypto miners in the Central Asian country have been caught in the midst of an energy crisis and protests over surging fuel prices.

President Kassym-Jomart Tokayev ordered Kazakhstan’s telecom provider to suspend internet services in the country. This impacted about 15% of the world’s bitcoin miners, taking them offline. Didar Bekbau, a crypto miner, said no internet, so no mining.

Kazakhstan’s turmoil also took a swipe at bitcoin’s price, sending it rolling below the $43,000 mark. As such, the world’s most popular cryptocurrency declined by over 8%. According to the Cambridge Centre for Alternative Finance, the Central Asian country is second to the United States in regards to the global bitcoin mining market. However, experts say Kazakhstan has been pleased about the crypto-mining boom. In fact, lawmakers have been trying to set new rules to curb mining. Kazakhstan is set to hit crypto miners with extra taxes this year. This will take a toll on incentives.

Nic Carter, Co-Founder of Castle Island Ventures, said the internet blackout follows efforts to implement a de facto ban on crypto mining in the country. It is important for miners to know of Kazakhstan’s political atmosphere, energy crisis and the risks associated. Carter pointed out that crypto miners prefer politically stable countries. But then the miners who were in Kazakhstan were in for the short-term as they have “older equipment”.

Alex Brammer, the Vice-President of Business Development at Luxor Tech, said companies prefer to deploy new machines in stable and energy-efficient, and renewable areas. Kazakhstan energy is carbon-intensive as it thrives on coal. And miners moved there because of the sudden crackdown on the crypto mining industry left the miners with no choice but to move to the nearest viable area.

And now, they have to move out of Kazakhstan.

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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