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Kazakhstan faces massive power outages, crypto mining to blame

The country, which is currently importing electricity from Russia at a higher tariff to meet the requisite demands, also saw three of its major power plants undergo an emergency shutdown in October.

November 29, 2021 / 01:53 PM IST
HOW MANY ARE THERE? | Bitcoin’s supply is limited to 21 million - a number that is expected to be reached around the year 2140. So far, around 16.7 million bitcoins have been released into the system, with 12.5 new ones released roughly every 10 minutes via a process called “mining”, in which a global network of computers competes to solve complex algorithms in reward for the new bitcoins.

HOW MANY ARE THERE? | Bitcoin’s supply is limited to 21 million - a number that is expected to be reached around the year 2140. So far, around 16.7 million bitcoins have been released into the system, with 12.5 new ones released roughly every 10 minutes via a process called “mining”, in which a global network of computers competes to solve complex algorithms in reward for the new bitcoins.

Kazakhstan has witnessed a massive jump in its demand for electricity, surging almost 8 percent this year as compared to the conventional 1-2 percent seen before. The reason? Uncontrolled electricity consumption by massive computer farms involved in cryptocurrency mining. 

The country, which is currently importing electricity from Russia at a higher tariff to meet the requisite demands, also saw three of its major power plants undergo an emergency shutdown in October.

Read the latest cryptocurrency-related news here

In order to prevent such a situation from happening again, the country's local electrical grid operator, the Kazakhstan Electricity Grid Operating Company announced that they will start rationing electricity for 50 of the country's registered miners. In addition, legitimate miners will be required to pay up to around 1 Kazakhstan tenge (approx. Rs. 0.17) per kWh to discern them from legal ones.

Also read: Cryptocurrencies a bad omen for gold

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“New regulatory requirements and criteria for the crypto mining industry must be adopted to streamline its operations while developing a comprehensive ecosystem for digital assets,” said a recent statement by Dyusenbay Turganov, member of the Mazhilis, the lower house of Kazakhstan’s parliament.

With China tightening its grip around cryptocurrency mining in the mainland, Kazakhstan has emerged as a favourable destination for cryptocurrency miners, owning to cheaper and more accessible electricity options.



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Ira Puranik
first published: Nov 29, 2021 01:53 pm
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