Central Asian nation has No. 2 hashrate in the world
If you’re a Bitcoin investor, you might not have connected the civil unrest in Kazakhstan this week — if you were even aware of it — to a drop in your portfolio. What you might not know is that after China’s latest crackdown, Kazakhstan in the world’s No. 2 center for crypto mining. Deadly protests against the country’s authoritarian government brought nationwide cell and internet outages that knocked out 18% of Bitcoin’s hashrate — the amount of computing power being used on the cryptocurrency’s network.
Leading mining pools lost an average of more than 10% of their hashrates and Bitcoin’s value dropped below $43,000 on Thursday, the lowest in months for the notoriously volatile currency. The surge in mining operations in Kazakhstan might have played a role in sparking the protests, as the mining operations are powered by ageing coal plants and increased demand has put on a strain on the country’s power grid. Energy prices have skyrocketed, with liquid petroleum costs doubling overnight with the new year in the oil- and natural gas-rich nation.
Kazakh president Kassym-Jomart Tokayev tried to appease protestors by dismissing his government but also has labeled protestors terrorists and appealed to a Russian-led military alliance for help in quelling the unrest and is almost certainly behind the nationwide internet shutdown. It is hard to tell when the violence might end and mining operations come back online, though service was partially restored for a few hours Wednesday.
Until then, or until miners find another new home, hashrates will remain down and Bitcoin prices will remain in flux.