Kazakhstan is home to one of the world's largest hubs for cryptocurrency mining. But the Kazakh mining scene could quickly change thanks to some proposed electricity regulations. Two founders of a leading Kazakhstan-based mining company are guests on this livestream to discuss their country's mining industry.
This livestream is essential educational information for anyone who wants a broader perspective on the global mining scene and any miners that are exploring new mining ventures or operations inside Kazakhstan.
Other ways to watch and read about this conversation:
Watch previous livestreams here.
- David Bekbau, Co-founder of Xive Mining
- Olzhas Kemal, Co-founder of Xive Mining
The state of mining in Kazakhstan right now? (timestamp)
- A lot of Chinese miners moved to Kazakhstan.
- Other foreign large mining facilities moved there, for example Genesis Mining.
- Kazakhstan has the largest share of the network hash rate (18%) after the U.S.
- Infrastructure left over from the soviet union is used for mining.
- Electricity voltage from this infrastructure was downgraded and repurposed for bitcoin mining.
- The Kazak government limits upside on power sales, miners buy from Russia and sell in Kazakhstan.
- Due to electricity shortages, some mining farms are disconnecting from the grid.
- Some gov. officials have proposed more expensive rates for mining electricity.
Kazakh vs. Russia, power market overview (timestamp)
- Both countries limit usage with different regulations.
- $0.05/kWh in Russia vs $0.035/kWh in Kazakhstan, during times of crisis miners of each country buy power from each other. In these arrangements they may be subject to additional fees and penalties
- Higher electricity prices can discourage providers to maintain and update facilities in both countries.
Update on Xive's bitcoin mining farms (timestamp)
- Xive is expanding into more farms to support Antminer and Whatsminer machines.
- Xive built more containers for ASICs.
- Construction has temporarily halted due to government electricity regulations for miners.
What are supply chains like for building farms in Kazakhstan? (timestamp)
- Containers are hard to find due to shortages.
- Water panels and ventilators are purchased from China.
- Cabling for miners is purchased from Russia.
Chinese miners relocation process and challenges (timestamp)
- It’s easier to do business in Kazakhstan because the documentation is clear.
- Kazak consulting companies can help foreign miners draft and enter into power arrangements.
When did the electricity regulation conversations start? (timestamp)
- The first electricity management proposal was to restrict bitcoin mining.
- Every 2-3 days new proposals are being made in government regarding mining.
- Suggestions include: limiting capacity per miner (1 megawatt per miner) and increasing electricity rates for miners.
- Lawyers sometimes get involved in these conversations on behalf of bitcoin miners.
- There is an electricity deficit in the country, but it can be solved collectively without targeting miners.
- Recent law signed: Miners liable for taxes from January 2022.
What's the worst case scenario vs. most likely outcome for Kazakhstan power regulations for miners? (timestamp)
- Limiting all Kazakhstan mining to 100 MW is crazy and probably will be rejected.
- Most likely: the government disallows new farms but lets large existing farms continue operations, and taxes smaller and mid-sized farms
What percentage of hash rate do you expect Kazakhstan to hold? (timestamp)
- It will likely drop due to looming Kazak regulations, meanwhile foreign miners, including the United States miners, are building out mining farms.
- Kazakhstan has currently hit electrical capacity with a hash rate of 18%.
- We expect the hash rate to sit between 5-10% within the next 5 years.
What does the next 6-12 months look like for Xive? (timestamp)
- Xive is building off-grid facilities powered by natural gas.
- Xive plans to visit the United States and look for areas to deploy farms and projects.
- Xive recently launched "mini farms". They have 100 machine farms each and allow clients to buy part of the farm and its machines.