Crypto Miners In Kazakhstan Forced To Flee Over Old Infrastructure

The crypto miners in Kazakhstan are forced to flee out of the country due to the old and aging infrastructure especially since now the industry was boosted by China’s grip on crypto regulation. In today’s crypto news, we are reading more about it.

The crypto miners in Kazakhstan became quite popular as many of the Chinese miners moved to the country because of the tight ban they imposed in the country. A few months down the line, however, it is emerging that Kazakh-miners are being fed up with electricity shortages. Some miners reproted nearing bankruptcy because of the national grid’s inability to supply consistent power. Just as the country became a huge global mining hub, it seems that things went south as miners started to leave.

China banned financial institutions from dealing with crypto transactions and in the months after, Chinese authorities became the hardline on the matter. A statement from the People’s Bank of China said that all of the activities are now illegal. People are avoiding the rule as expected and turned to DEXes and P2P exchanges so now in some cases they are continuing to use the exchanges via VPNs and foreign registered details. The PBoC also aimed to crack down on the loopholes including labeling the use of overseas exchanges like the illegal financial activity and said that it is justified because digital currency endangers the safety of the people’s assets:

“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity.”

The upshot to all of this was a huge slowdown in crypto activity in China most notably in the drop in the mining hashrate that is coming out of China. The data from Cambridge Bitcoin Electricity Consumption Index showed off a huge tail in BTC hashrate from China in May and at the same time, Kazakhstan’s hashrate went from 11.9 EH/S in May and doubled to 21.9 EH/s in August. Part of the reason for this was the Kazakh government’s encouragement of mining via recognizing the activity in legislation and giving tax breaks to the miners.

It helps that the country enjoys a lot of the low electricity prices globally at $0.041 per Kwh for households. As quickly as the miners set up base in Kazakhstan with the country’s aging electricity grid was strained. The residents blame the power cuts directly on the presence of the miners in the country. The founder of Xive the crypto mining company operating in the region as Didar Bekbauov said:

“They made mining [a] scapegoat.”

He added that Xive closed one of the mining farms in the south of Kazakhstan with the power being cut in November. While the company operates another facility in the country, he is thinking of closing all operations and moving to the US.