No, Kazakhstan isn’t the 2nd-largest mining country anymore. No, its energy crisis was not cause by mining. No, its internet shutdown did not affect global Bitcoin mining ?
The media has written a lot about Kazakhstan these days, sometimes linking its energy crisis to crypto mining.
Kazakhstan indeed was accountable for 18% of Bitcoin hashrate as of August’21 (source: CBECI), right after the Chinese miners were forced to leave their country. This figure is inappropriate now, but the media continues giving it on every occasion, because CBECI did not update their website since…
Crypto miners started fleeing Kazakhstan since autumn, when it became clear that the country’s energy supplies were not sufficient and its low energy prices were mostly due to the government price control.
This price control was levied on January 1st 2022, which quickly resulted in the liquefied gas’ price increasing twofold. This, together with the general dissatisfaction with the government and economic inequality, led to massive unrests all over the country, causing deaths of 44 people.
These tragic events caused havoc in Kazakhstan, but they did nothing to Bitcoin mining – all we have to do is look at Bitcoin hashrate.
During the 5 days that the government has shut down the Internet in Kazakhstan, Bitcoin hashrate has reached its all-time high of 183M TH/s, telling a lot about the country’s (un)importance in global mining, even in the absence of a global study.
Miners’ exodus from China (65% of global hashrate at the time), and then – from Kazakhstan (18%), is a sign of Bitcoin resilience, and it is globally a good thing: after the shuffling is done, miners will end up settling in a place with cheap and abundant energy, which are often synonyms for “renewable” and “wasted”…
We send our love to the people of Kazakhstan ❤️