Kazakhstan is now the second-biggest bitcoin mining location globally
The cryptocurrency mining industry can be both a blessing and a curse as big players keep moving from one country to another, pushed around by the various limitations imposed by authorities. When China decided to step down and ban all crypto transactions and mining, many decided to move to Kazakhstan. Now, it seems that a crackdown in this country is imminent as well.
According to the Cambridge Centre for Alternative Finance, quoted by Reuters, the 19 million-large Central Asian nation has moved all the way up and is now behind the United States as the world's second-biggest mining location. Sadly, this situation has led to the rationing of domestic supplies and large power imports.
In Kazakhstan, most power comes from coal-powered plants, and the country's officials estimate that about 8 percent of the total generation capacity goes to miners. In numbers, this means 1.2 GWt for grey mining and about 600 MWt for white miners. Some of the grey miners aim to go legal, but they have no idea about the taxes that they might be subjected to in the coming months. For now, it looks like the government is still thinking about the path to follow.
Yedige Davletgaliyev, an engineer at blockchain analytics company Blockchair, believes that "Kazakhstan has an opportunity to develop its weak electric power sector at others' expense and make some money on top of it." On the other hand, Deputy Energy Minister Murat Zhurebekov says that "we will have the directive (limiting power to unregistered miners) issued before the end of this year, because this issue cannot be delayed any longer."
While the above makes sense, Kazakhstan's authorities have a tough task lying ahead because the state-regulated electricity prices cannot be raised overnight for everyone while keeping inflation in check. Remains to see the impact on the market of what will happen in Kazakhstan, because — based on all the above — something will happen sooner or later.