Kazhakstan suffering through a power crisis due to increased cryptocurrency mining

According to the Financial Times, Kazakhstan is currently experiencing a power crisis as a result of the flood of Chinese bitcoin miners. With China’s complete ban on cryptocurrency mining, several mine owners have opted to relocate their operations to Kazakhstan. According to statistics, the country’s power usage has climbed by around 8% since 2021. Previously, the yearly growth rate of power consumption in the country was barely 1-2 percent.

According to research from the University of Cambridge, Kazakhstan has overtaken the United States as the world’s second-largest cryptocurrency mining region.

The three most major coal-fired power stations in Kazakhstan face an emergency closure owing to excessive electrical pressure in October 2021. According to Coindesk, the country’s Ministry of Energy would limit mines from utilizing moreover 100 megawatts (MW) of electricity within two years, however, this restriction was later lifted for licensed miners.

The Kazakhstan power grid operator KEGOC has also cautioned that just 50 government-registered cryptocurrency mining would be permitted to produce electricity to assist relieve the problem of power shortages. According to officials in the country, the current strain on the electrical infrastructure is due to a rise in the number of illicit miners. Unregistered illicit mines, according to experts, utilize nearly 1,200 megawatts of power.

Kazakhstan will begin charging extra fees to licensed miners in 2022, at a rate of about US$0.0023 (about 1 penny) per kilowatt-hour. In the near term, the country must rely on Russian energy provider Inter RAO for a portion of its electricity to get through the winter.

Iran, like other nations, has limits on cryptocurrency mining. To address power shortages, the nation placed a four-month moratorium on cryptocurrency mining in May. Miners in the United States are relocating to Texas due to reduced power rates and lax restrictions. Experts expect that the mine’s electricity usage will surpass 5000 MW, putting significant strain on the local power supply.

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