The primary process through which cryptocurrency is created is called mining, and one of the world’s most influential countries is facing power outages because of it. Kazakhstan is one of the most critical countries globally but still is facing a lot of crises. The major crisis with which the country is dealing is electricity, and now, it is importing electricity from Russia. However, Russia is charging very high prices for the electricity it is providing to Kazakhstan, and still, the country cannot complete its request or demand. Also, recently, three major power plants in Kazakhstan were down because of an emergency in October, which led to further outrage. The main reason behind this is that cryptocurrency mining is carried out in different countries.
There is a limited supply of 21 million bitcoins globally, and still, people are not very careful about it. Around 16.7 bitcoin million bitcoins have been created to date, and the limit is expected to be exhausted by 2140. 12.5 new bitcoins are released every 10 minutes by a mining process, which is why Kazakhstan faces significant power outages. Global network computers compete to solve the complex algorithms to get bitcoin as a reward in this process. Before cryptocurrency mining came to Kazakhstan, the power increase was just 1 to 2% every year consecutively. However, this year, the power demand increased by 8% massively, which led to a power shortage in Kazakhstan. Because of this, the country has to import electricity from some other nation, costing a lot and degrading the country’s financial health.
The import of electricity from Russia was not carried out just recently, but it has been done for about a year now. However, recently, three major power plants were down, leading to a major power crisis. The main reason is cryptocurrency mining that is carried on at a considerable level in the country. Therefore, Kazakhstan has to pay very high tariffs to Russia to meet its demand, and the significant population does not have to suffer. However, the country’s consecutive increasing demand for electricity will certainly not meet the levels. Also, the government is about to stop cryptocurrency mining operations from dealing with the major crisis that the country is facing at this point.
The government of Kazakhstan is taking measures to curb the prices of electricity shortages. Therefore, the local electrical grid operator, the Kazakhstan electricity grid operating company, has announced that it will start reasoning about electricity for the cryptocurrency mining firms who are the major ones in the country. Apart from this, the legitimate cryptocurrency mining firms will also have to pay around one Kazakhstan tenge per kilowatt-hour. It is the course that we have to pay to separate them from the legal ones. Apart from this, specific other measures are also taken by the cryptocurrency mining firms. They also want to rationalise the electricity supply and the requirement to contribute to the country’s good. If the electricity demand is not made for the cryptocurrency miners, they will not be able to create more coins, and hence, they will also have to shut down.
According to a member of the lower house of Kazakhstan’s parliament, there will be new regulatory requirements and criteria for the industry of cryptocurrency mining. They will have to follow the rules and regulations set by the government to meet their requirements and provide them with the sufficient amount of electricity they need. Get started to know about the right platform to earn bitcoins. As of data available on the internet, China is the centre for cryptocurrency mining firms. It is because earlier, they had a lot of cheap electricity. However, now things have changed drastically. China has imposed high charges on the firms which are dealing in cryptocurrency mining. On the contrary, now, Kazakhstan has been a favourable location for cryptocurrency mining firms. As a result, some of the large firms shifting from China took residence in Kazakhstan, leading to the boost and economy. Also, the main reason behind shifting to Kazakhstan is its accessibility of more electricity at cheaper rates.
Elora is PR and Outreach Manager at Crunchoid Inc. Outside of work, Elora enjoys Flywheel, tacos, the tennis, and adventuring around the globe.