Mining Cryptocurrency is an energy-intensive process, and there is massive consumption of energy. The cheap coal-based electricity in Northern China has led to a crypto mining boom. Post Crackdown in China, most mining hubs have relocated to other countries.
However, with China turning to eco-friendly energy sources, power has become costlier. Further, an extensive crackdown by the Chinese Government forced hundreds of mining hubs to other locations, including Kazakhstan. However, power outages in the former Soviet Republic have forced miners to look for areas with more stable energy supplies like the United States reports news.bitcoin.com.
Crypto Miners close Crypto Farms Due to Kazakhstan’s Issues with Power Generation.
Kazakhstan has enormous hydrocarbon deposits, but it neglected infrastructure and is now paying the price of its fallacies. When miners shifted to Kazakhstan, the nation rolled out the red carpet, and why not? Crypto mining activities bring in billions of dollars as foreign exchange. However, as the mining activities surged, the energy-hungry coin minting facilities started gobbling a significant portion of the nation’s energy supply. Kazakhstan could not cater to the sudden surge in demand for electricity.
Crypto miners allege they are being made scapegoat
Authorities blame the latest round of power outages on the sudden surge in electricity consumption due to the mushrooming mining data centers. Lawmakers have advocated providing electricity to mining hubs at a higher tariff than ordinary citizens’ pay. However, the mining industry blames the present situation on the lack of infrastructure development by the Government. We have been made a scapegoat, said Didar Bekbauov, founder of the local mining hosting company Xive, per news.Bitcoin.com.
The Data Center Industry and Blockchain Association of Kazakhstan had in November finalized an agreement with the country’s grid operator, KEGOC, to ensure uninterrupted power supplies to registered miners. However, the state-run grid has not fulfilled its part of the agreement forcing many mining rigs to close down or look to migrate to nations with better energy supply regimens.
Another significant issue is the thriving illegal crypto mining centers that run clandestinely to mint digital currencies in basements and garages. The “gray miners” gobble vast amounts of electricity, and today it is almost impossible to get rid of them.
Kazakhstan has realized that it will lose almost $1.5 billion into its economy in the next five years and over $300 million in tax revenue if the mining hubs relocate. Therefore, it is making amends and planning to build power plants with a combined 3,000-megawatt generating capacity in the coming years. A significant portion of this power will be developed from eco-friendly sources, including nuclear power.
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