Cryptocurrencies are banned in China, so miners had to find a new home, and it will be Kazakhstan.
A rather unexpected consequence of China’s new policy on cryptocurrency mining and holding is the massive arrival of miners in neighboring Kazakhstan. This central Asian state, a former member of the USSR, has since distanced itself from Russia, although ties remain very strong between the two countries. But Astana has decided to move closer to Beijing and China, to the delight of people mining cryptocurrencies.
The latter have indeed recently become illegal in China, and it is a whole part of the economy of the country which has collapsed, and thousands of Chinese who have lost their means of earning a living. Rather frowned upon in the country of the Middle Kingdom, these miners decided to cross the border to establish their news “Bitcoin farms” further west.
Kazakhstan unfortunate winner
Even more unexpected consequence of this relocation of bitcoin miners, Kazakhstan’s electricity is threatened. Indeed, the country of Central Asia does not have the capacity to run the 50 registered minors as well as the classic economy of the country. Power cuts are quite common lately in this country, which is becoming a scarce commodity.
According to the Kazakh Energy Ministry, the country’s electricity consumption jumped 8% in 2021, an increase due almost exclusively to cryptocurrency miners who consume a lot. Since October, numerous power outages have taken place in the six regions closest to the border, where the miners have decided to take a stand.
A tax while waiting for more
In order to reduce as much as possible the impact on Kazakh society of this massive arrival of cryptocurrency miners, they will be taxed from 2022 on one tenge (the local currency, equivalent to 0.0020 euros) for each kilowatt hour consumed. by their farm. While waiting for a more complete electricity network capable of meeting everyone’s needs, the country has asked for help from Russia and a private energy company.
The latter should provide most of the power for the miners in the coming weeks, but the miners have also been asked to find long-term solutions to move their farms or find their own electricity, with the installation of wind farm or solar panel fields at their expense.