New Study Finds Cryptocurrency Miners Are Eyeing Kazakhstan
Kazakhstan has swiftly become a mining epicenter after a crackdown by China on crypto miners recently. Walls of the Chinese ecosystem have been narrowed down on crypto miners, and the result is visible all over the world. In the past 24 hours, only 77 Bitcoin blocks were mined instead of the usual 144 blocks. These numbers show the intensity of the crackdown by China on its crypto mining industry.
On 21st May this year, China’s Vice President Mr. Liu He had ordered a clampdown on mining as well as trading of Bitcoin and other digital currencies by saying that it is a financial and economic threat for their country. Among all the developed countries, China is the only one to react so harshly so far. China has done this crackdown mainly by cutting power supplies of the firms that are probably involved in crypto mining.
We have been tracking this diaspora and have spoken to some Kazakhstan-based companies, out of which one has reported a hike in demand for its services. Previously, the demand was for only hosting space, but after the crackdown by China, the demand has increased for building facilities as well. It means that the miners do not have any intention of staying in China and want to relocate as soon as possible.
This is happening at a very fast pace which shows that the market is not expecting any leniency from the Chinese, which is why they are shifting. Some companies are troubled by these demands because of the country’s lack of power infrastructure. It is because the country has a limited population (18 million) that is why the Government had kept power generation limited as well. Extra energy is already being used by miners.
There is a probability that Kazakhstan would impose a one Kazakhstani Tenge tax on miners, which equals 0.002 dollars only. This is a frail amount in front of the kilowatt per hour energy they would use.
What China is losing by its crackdown can prove again for the central Asian country, but the above-mentioned problem is a severe hindrance in its way. This limitation will force the miners to explore some other venue for their venture because Kazakhstan can only hold a limited number of mining firms.