In May, China placed a ban on Bitcoin mining, in a move that meant that mining firms would have to either close up shop or look elsewhere. And as crypto miners went in search of crypto-friendly locations, Kazakhstan was one of the welcoming places. In fact at a point, the government did say mining activities will not be taxed.
Bitcoin Mining Too Tasking for Kazakhstan’s Power
However, since the exiled China miners arrived in nearby Kazakhstan, their activities have continued to drain the country’s power grid. And per a recent publication by the Financial Times, the development has seen the Kazakhstani government, looking to Russia for an auxiliary power solution.
Within just 8 months, Kazakhstan’s hash rate grew 3 times from 6% of hash rate to 18% on the Bitcoin network, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI). In ranking, Kazakhstan comes only behind the United States — the country with the largest presence on the network with nearly 35%. While Russia comes in as third, with 11%.
Meanwhile, all these figures might not exactly depict how much bitcoin mining has grown in Kazakhstan.
Recall that CBECI last released hash rate estimates by country back in the month of August. And of course, at the time, total network hash rate fell through even as mining rigs closed up following China’s ban of Bitcoin mining. Since then however, total network hash rate has steadily climbed back to where it was in April, infact increasing by more than 43%.
Probably Worth It?
At a point, Kazakhstan was producing twice as much power as it consumes, per reports from International Energy Agency — an NGO. But now with the mining activities currently going on within its borders, Kazakhstan may be leaning towards consuming more than it can actually produce.
Meanwhile, looking at the country expectations that crypto mining will add $1.5 billion to its economy in the course of the next five years, it may all be worth it after all. But how feasible is it really?
As confirmed by the National Association of Blockchain and Data Center Industry of Kazakhstan, there’s still a large number of crypto mining companies who aren’t properly registered (the gray miners).