Kazakhstan’s national grid operator has begun restricting energy to the country’s largest customers, with: cryptocurrency mining farms are presumably the target. Officials may reconsider their recent adoption of the crypto business in the face of an impending power shortage.
Bitcoin’s global processing power dropped about 13% after data centers used to mine the cryptocurrency were knocked offline due to shutdowns amid an uptick in instability in the country.
Read more: Kazakhstan proposes 500% tax hike
To perform the mathematical calculations required to produce new blocks on the network, Bitcoin mining requires specialized computer hardware. Up to 10,000 mining rigs, consisting of ASICs (application-specific integrated circuits), GPUs, racks, cooling units and other equipment, are housed in more extensive mining operations.
According to Alan Dorjiyev of Kazakhstan’s National Association of Blockchain and Data Center Industry, most crypto producers are now back online, representing 80% of the country’s legitimate mining ventures.
Playing with power
The crypto mining companies in Kazakhstan are mainly fueled by old coal plants, causing problems for the government in its efforts to decarbonise the economy. The former Soviet state has been forced to import electricity and restrict local supplies because of power-hungry miners.
However, Kazakhstan is relative low taxes, labor costs and equipment remain beneficial, according to the four miners. According to Matkenov, power costs a minimum of $0.03-$0.04 per kilowatt, comparable to the United States and less than $0.05 in Russia.
The main thing that attracts miners seems to be cheap power. According to Cointelegraph, the United States “cannot hold the title of mining champion for long” because it cannot deliver the lowest energy. Removing that lead from Kazakhstan’s miners could spell disaster for the country’s plans to take $1.5 billion from miners over the next five years.
This post Crypto Tax: Kazakhstan recommends tax on cryptocurrency miners
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