Kazakhstan’s energy infrastructure, which now contributes the second-largest share of Bitcoin hashrate, may be unprepared to manage the influx of numerous cryptocurrency miners from China and other countries wanting to take advantage of low-cost electricity.
Government authorities in Kazakhstan estimate that unregistered crypto miners in the nation are consuming twice as much electricity as those who are registered to avoid paying taxes and other costs, according to a Reuters article published Nov. 10. All crypto miners in Kazakhstan might be utilizing up to 1.2 gigawatts of electricity, or around 8% of the country’s total power generating capacity.
Addressing the possible pressure on Kazakhstan‘s electricity infrastructure “cannot be delayed any longer,” according to Kazakhstan’s vice minister of energy, Murat Zhurebekov. Officials intended to issue an order limiting the electricity use of unregistered miners, he added, but he did not indicate how they would be identified.
As a result of the departure of crypto miners following a government crackdown in China, Kazakhstan and the United States are now the countries contributing the most hashing power to Bitcoin (BTC). Major mining pools like BTC.com and companies like Canaan have set up shop on the other side of the border.
President Kassym-Jomart Tokayev approved legislation in June putting new tariffs on the electricity used by licensed crypto miners in Kazakhstan. According to reports, the bill would impose an extra $0.00233 per kilowatt-hour levy, which would go into effect in January 2022.
Kazakhstan contributed more than 18 percent of the average monthly hashrate share for the BTC network in July, according to statistics from the Cambridge Centre for Alternative Finance, with the United States providing more than 35 percent. According to a research published by Cointelegraph in October, cryptocurrency mining income in Kazakhstan is expected to reach $1.5 billion over the next five years.