Kazakhstan’s government is scrambling to fix ongoing problems with its electrical infrastructure. Some bitcoin miners fear potential government proposals for rigid power constraints on mining related activities.
Kazakhstan is a growing hub for cryptocurrency mining. The Central Asian country is home to over 20 cryptocurrency mining farms run by BIT Mining, Canaan, KazDigital, Xive, and other companies. After China’s mining crackdown in May, a significant amount of hashrate relocated there. Miners were attracted by Kazakhstan’s cheap power rates and favorable cryptocurrency laws.
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Kazakhstan’s power problem
Power outages in January were blamed on harsh winter weather. At that time, most of the electricity supply issues happened in Kazakhstan’s west, according to Reuters.
In July, continued outages were blamed on harsh summer heat and surges in air conditioning demand. Almaty, the largest city in Kazakhstan, suffered a total blackout in mid July, which forced everything from traffic lights to trains to shut down.
The Kazakh government is working to fix its power problem as quickly as possible.
- Energy Minister Magzum Mirzagaliev outlined three new investments in the country’s electric power industry.
- State-owned power company Samruk Energy plans to rehabilitate a 4,000 MW coal plant.
- President Tokayev said Kazakhstan needs a nuclear power plant.
Bitcoin miners fear power cuts
Whenever power grids face outages or other supply problems, bitcoin miners are common scapegoats. Iran’s government is one of the latest to blame power outages on mining, and Kazakhstan could follow suit by cutting or severely limiting power accessible to miners. In June, Kazakhstan imposed a surcharge of 1 Kazakhstan tenge ($0.00233) per kilowatt-hour used by cryptocurrency miners. They may increase this fee to discourage local miners.
Some miners fear power cuts, not just higher prices. Xive co-founder Didar Bekbauov took to Twitter on Thursday to share his concerns, saying that miners in South Kazakhstan are at “risk of harsh electricity limits for mining.”
For now, no concrete actions have been taken against Kazakh miners.
- A headline from Kazakhstan Today blamed cryptocurrency miners for the country's power shortages.
- The Energy Ministry has submitted for public discussion an order to change power consumption rules for miners.
Prior to this submission, the country’s Ministry of Energy had not released any official statements on power cuts for cryptocurrency mining or any other industry. A Twitter account seemingly associated with the Ministry’s head, Magzum Mirzagaliev, said energy resources and electricity are “normal” and under control.