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Bitcoin crashes as Kazakhstan crackdown on cryptocurrency mining

Bitcoin crashes as Kazakhstan crackdown on cryptocurrency mining
Bitcoin crashes as Kazakhstan crackdown on cryptocurrency mining

A recent shutdown in Kazakhstan’s internet has sparked a drop in the global bitcoin computing power. This has caused a sharp decline for countries that have been heavily reliant on their mining industries, such as Kazakhstan.

Kazakhstan has become one of the world’s largest bitcoin mining hubs this year after China, one of the largest crypto mining hotspots, cracked down on crypto mining.

Russia sent troops to Kazakhstan on Thursday to help put down the nationwide uprising after violence spread across the tightly controlled former Soviet state. Russian law enforcement has killed many protesters in the main city Almaty, while state television said that 13 members of the security forces had died.

The internet was shut down across the country yesterday according to a site that monitors disruptions to global internet access. The shutdown lasted throughout the day and was one of the longest in history.

Had this happened, this would have prevented Kazakhstan-based miners from accessing the Bitcoin network.

Bitcoin and other cryptocurrencies are generated through the process called mining. They are created or mined by high-powered computers, usually in data centers all over the world. These computers compete to solve complex math puzzles in a highly energy-demanding process.

This August, 18% of the world’s computing power was used as a part of the bitcoin network. The statistic is from the most recent data available, so it will undoubtedly change over time as more people join.

According to a report just published by the Chinese Academy of Sciences, in April before China’s latest crackdown on bitcoin mining, the figure was only 8%.

The hashrate of major crypto mining pools such as AntPool and F2Pool (a free bitcoin mining pool) has fallen by around 14% since late Tuesday at 12:15 am GMT. Some data from mini-updates – a site that tracks the fluctuations – showed hashrates had halved, with one of the reasons for this was people fearing they will not be able to turn a profit.

Cryptocurrency Mining Crackdown

A lack of miners doesn’t necessarily mean the price of Bitcoin will drop.

Bitcoin fell further on Thursday, trading at under $43,000. Investors are shifting to less risky assets such as bonds or cash and away from Bitcoin because U.S. Federal Reserve officials want to do more than just raise interest rates.

If your mining hobby starts to slow down, you can sell your hardware on eBay. This can help keep the hashrate high, which’s great for making new bitcoin!

Ageing coal plants and coal mines in Kazakhstan power most of their crypto mining farms. Authorities are trying to stop this since they want to drive away other countries from investing here because of the pollution and its damage to the environment.

Last year, the Kazakh government said they would be cracking down on “grey” miners which are believed to consume twice as many resources as white or officially registered ones.

Last year, Kazakhstan’s energy ministry said that “grey” miners might be consuming as much as 1.2 GWt of power out of the country’s total generated capacity. Combined with 600 MWt from white miners, this would account for around 8% of the country’s total generation capacity.

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Any references on this website or blog are an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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