As the Internet in Kazakhstan was shut down during a deadly uprising this week, the global computing power of the Bitcoin network has plummeted, which has hit the country’s fast-growing cryptocurrency mining industry.
According to data from the Cambridge Alternative Finance Center, Kazakhstan became the world’s second largest Bitcoin mining center after the United States last year. Prior to this, China’s main hub, China, banned cryptocurrency mining activities. The price of Bitcoin in India is Rs. As of 10:20 AM US Standard Time on January 7, it had reached 3.35 million.
Russia sent paratroopers into Kazakhstan on Thursday to help suppress uprisings across the country as violence spread in this strictly controlled former Soviet country. The police said they killed dozens of mobs in the main city of Almaty, while state television reported that 13 members of the security forces had died. “.
This move may prevent miners in Kazakhstan from accessing the Bitcoin network.
Bitcoin and other cryptocurrencies are created or “mined” by high-performance computers, usually located in data centers in different parts of the world, and they compete to solve complex mathematical problems in a highly energy-intensive process. Last August, the most recent time based on available data, Kazakhstan accounted for 18% of the global “hash rate”-the cryptographic term for the computing power used by computers connected to the Bitcoin network.
In April, before China’s latest crackdown on Bitcoin mining, this figure was only 8%.
On Thursday at 1215 GMT (5:45 PM U.S. Standard Time), the hash rate of major crypto mining pools-miners in different locations collaborate to produce bitcoin-including AntPool and F2Pool, reportedly their hash rate ratio The level fell by about 14% late Tuesday. Data from mining company BTC.com. Neither mining pool immediately responded to Reuters’ request for comment.
Cracking down on cryptocurrency mining
However, the drop in hash rate does not necessarily support the price of Bitcoin.
Bitcoin fell below $43,000 (approximately 3.2 million rupees) on Thursday, a test low of several months, as investor interest in risky assets declined as the Fed tends to take more aggressive policy actions.
The more miners on the network, the greater the computer power required to mine new bitcoins. If miners exit the network, the hash rate will drop, which theoretically makes it easier for the remaining miners to produce new coins.
The cryptocurrency mines in Kazakhstan are mainly powered by aging coal power plants, and these power plants themselves—along with coal mines and the entire towns built around them—are a headache for the authorities when they seek to decarbonize the economy.
The government of Kazakhstan said last year that it plans to crack down on unregistered “gray” miners first. It is estimated that these miners may consume twice as much electricity as “white” or officially registered miners.
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