Kazakh Crypto Miners displeased with Insufficient Power, Threaten migration

Previously, the crypto mining industry of Kazakhstan was boosted by China’s heightened policies regarding digital asset regulation. However, several Kazakh-based miners have complained about electricity shortages. Some miners reported that the inconsistency in power has led to their operations going bankrupt.

Last May, China banned financial institutions from dealing with crypto transactions, and in the following months, regulations have only become stricter. Last September, the People’s Bank of China (PBoC) released a statement announcing that all crypto activities are now illegal.

In light of this, Kazahkstan doubled its “hashrate” from May to August this year. Hashrate refers to the total computational power being used to process transactions and mine new coins.

This rise can also be attributed to the Kazakh government. To encourage miners to work in the country, the government has offered tax breaks for those working in the industry. Due to the country’s tax policies, crypto miners flocked to set up operations.

However, the sudden influx of crypto mining machinery caused a major strain on the country’s power grid.

Dibar Bekbauov, the founder of crypto mining firm Xive, has stated that “They made mining [a] scapegoat.”

He adds that Xive closed a mining farm in Kazakhstan after a power cut in November. While the company still operates other facilities in the country, he has considered moving all operations to the U.S.

Kazakhstan Electricity Grid Operating Company (KEGOC) said it was forced to cut electricity supply due to unscheduled repairs.

Source: CryptoSlate, The Motley Fool