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Bitcoin mining community on edge as Kazakhstan rations energy, Elizabeth Warren studies its climate impact

Bitcoin mining is becoming a thorny issue (image: Brian Wangenheim/Unsplash)
Bitcoin mining is becoming a thorny issue (image: Brian Wangenheim/Unsplash)
Cryptocurrency miners face a perfect regulatory storm from the looming financial regulation of digital assets on one side and the upcoming climate change bills on the other. Bitcoin mining in Kazakhstan became the second-largest globally after China banned its miners, but the country's energy infrastructure can't handle the load, and large mining platforms are relocating to the US. Here, however, Senator Elizabeth Warren has sent a letter demanding more info on the climate impact of Bitcoin mining, spelling further regulatory trouble for miners.

Following the huge drop in cryptocurrency prices after calls for the Fed to start raising interest rates, Bitcoin mining company stocks also took a drubbing, as there might be regulatory headwinds in their direction, too. Rampant inflation unseen in the last 30 years may force the Fed's hand earlier than planned, precipitating an exodus from risky assets like crypto. Bitcoin mining faces a host of other problems besides operational costs, however.

After China banned crypto miners because of electricity consumption, the geographical spread of their operations widened significantly. Bitcoin mining in Kazakhstan soon became the second-largest in concentration after Russia, buoyed by cheap electricity and the proximity to China. The country's energy infrastructure couldn't take the extra load and has introduced energy rationing in the past few weeks, forcing some mining platforms to exit Kazakhstan and head to the US.

Moreover, on the cusp of the first cryptocurrency exchange execs testimony before Congress next week, Senator Elizabeth Warren had sent a letter to Greenidge Generation Holdings CEO Jeff Kirt demanding statistics on how Bitcoin mining affects climate change. This spells double trouble for miners as the regulatory scrutiny vise tightens over them with the looming digital asset regulations on one side, and the climate impact of Bitcoin mining on the other. This perfect storm might explain why Bitcoin mining giants like Marathon Digital or Riot Blockchain saw their share prices drop double digits on Friday.

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Daniel Zlatev
Daniel Zlatev - Tech Writer - 260 articles published on Notebookcheck since 2021
Wooed by tech since the industrial espionage of Apple computers and the times of pixelized Nintendos, Daniel went and opened a gaming club when personal computers and consoles were still an expensive rarity. Nowadays, fascination is not with specs and speed but rather the lifestyle that computers in our pocket, house, and car have shoehorned us in, from the infinite scroll and the privacy hazards to authenticating every bit and move of our existence.
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2021 12 > Bitcoin mining community on edge as Kazakhstan rations energy, Elizabeth Warren studies its climate impact
Daniel Zlatev, 2021-12- 4 (Update: 2021-12- 4)