Desk Report
Publish: 17 Jan 2022, 08:02 pm
Bitcoin || Photo: Collected
Kazakhstan may no longer be the bitcoin
sanctuary it once was, according to some big miners who are looking to leave the
global crypto hub following internet shutdowns last week that compounded fears
about tightening regulation.
The government web shutdowns during an explosion
of unrest in the country, the world's second-largest centre for mining, caused
bitcoin's global computing power to drop around 13 per cent as data centres
used to produce the cryptocurrency were knocked offline, reports Reuters.
Alan Dorjiyev of the National Association of
Blockchain and Data Center Industry in Kazakhstan, which represents 80 per cent
of legal mining companies in the country, said most crypto producers were now
back online.
Yet the resumption of operations may belie
problems to come for the fast-growing cryptocurrency industry, according to
four major miners, with some saying they or their clients may look for other
countries to operate in.
The internet outage compounded growing concerns
about the stability and prospects of the business as tighter government oversight
looms, the miners said.
Vincent Liu, a miner who moved operations to
Kazakhstan from China to take advantage of the country's cheap power, said the
changing environment had led him to look at shifting operations to North
America or Russia.
"Two or three years earlier, we called Kazakhstan
a paradise of the mining industry because of the stable political environment
and stable electricity," said Liu.
"We are evaluating the situation ... I
suppose we will keep a part of hash rate in Kazakhstan and will move some to
other countries," he said.
Bitcoin and other cryptocurrencies are
"mined" by powerful computers that compete against others hooked up
to a global network to solve complex mathematical puzzles. The process guzzles
electricity and is often powered by fossil fuels.
Kazakhstan became the world's No.2 centre for
bitcoin mining after the United States last year, attracting an influx of
miners and data centre bookings from former global leader China after a crackdown
on the industry by Beijing.
In August, Kazakhstan accounted for 18 per cent
of the global "hash rate" - crypto jargon for the amount of computing
power being used by computers connected to the bitcoin network. That was up
from 8 per cent in April, before Chinese miners shifted machines and bought
capacity at Kazakh data centres.
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Topic : Kazakhstan Cryptocurrency
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