Kazakhstan’s Mining Sites Go Offline As Bitcoin’s Network Power Takes A Nosedive

In the face of the wide scale upheaval caused by rising protestors of spiking fuel prices in Kazakhstan, the country’s government shut down it’s internet this week. And conceivably, this move resulted in a major drop in global computing power of the bitcoin network (bear in mind that Bitcoin mining requires heavy computational setup that in turn demands large amount of energy to run).

Last year, Kazakhstan was officially dubbed as the second largest site for bitcoin mining after the United States, as per the Cambridge Centre for Alternative Finance. This, for the most part, may be attributed to the Eurasian nation’s decision to welcome the refugees recently expelled from China, leading to the country to then face an energy crisis.

The government’s consequent countermeasures to this issue significantly restricted the mining boom that was plaguing its cities, blurring the picture of just how much of the digital coins in circulation Kazakhstan was minting. However, on 5 January 2022, we received an estimate to this question: as stated to Fortune.

Going Off The Grid

With violent anti-government protests calling for civil unrest throughout the nation, the past few days have seen the President Kassym-Jomart Tokayev announce the resignation of the government and declaration of a state of emergency; while even troops from a Russian-led military alliance headed over on Jan 6 to assist in quelling the chaos.

In the midst of this rising discontent among the population, the government ordered that the largest telecom provider shut down the internet on Wednesday, as a bona fide “nation-scale internet blackout” occurred in Kazakhstan, in the words of the monitoring site Netblocks. This shuttering of the internet prevented Kazakhstan-based miners from communicating on the Bitcoin network.

Consequently, the ‘hashrate’, which measures the computational power in crypto mining, collapsed – told Fortune. They also reported that in merely a couple of hours into this outage, Larry Cermak of the crypto news and research site The Block tweeted that a full 12% of Bitcoin’s worldwide computational power had vanished.

Kazakhstan’s Importance In Bitcoin Mining

As pointed out by Reuters, Kazakhstan accounted for about 18% of the global hashrate (amount of computing power being used by computers hooked up to the bitcoin network) up until August last year. Before China’s clampdown on crypto miners in April, this number for Kazakhstan was only at 8 per cent.

The hashrate at major crypto mining pools took a simultaneous hit – the most severely impacted pools among these were 1THash (82% decline), OKExPool (46.3% decline) and KuCoinPool (22.7% decline) – including several others, like F2Pool, AntPool and ViaBTC, who were down by 12.8%, 11.6% and 19.2% respectively.

Data in the image sourced from BTC.com

Sneh Dokania is an Economics major student with an inquisitive disposition seeking to articulate facts, information and news stories in a candid manner on Clout News.

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