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For many, cryptocurrencies are a way to escape the centralized finance, meanwhile the governments are trying to tighten their grip on the digital assets to prevent it from becoming decentralized. Recently, Kazakhstan passed a bill for virtual currencies dubbed “On Digital Assets of the Republic of Kazakhstan”, centered around crypto mining activities.
Miners Need to Buy Surplus Energy via Public Grid
The bill will introduce new regulations for buying electricity used for digital assets mining and the associated tax schemes. Miners need to buy surplus power via the public grid. They can execute exclusive electricity purchases through Kazakhstan Electricity and Power Market Operator (KOREM).
According to the bill, the mining licensing procedure is divided into 2. One will focus on appropriate frameworks including location, security and location. The other will be centered around the miners, this involves the equipment owners renting cells in data centers and not claiming an energy quota.
According to Ekaterina Smyshlyaeva, a Mäjilis’ member, commented on the bill, stating that “The bill will include separate requirements for mining pools with respect to the location for the server capacity in the nation and compliance with information security guidelines.”
Earlier this year, Kazakhstan had to suffer an internet shutdown in the country, sending a hard blow to the Bitcoin hashrate. Fortune reported that the nation hosted around 18% of the total Bitcoin mining. It became the second biggest BTC mining center the same year, just behind the US.
According to the latest data, the US still holds the crown, accounting for 35.4% of the total network hashrate, followed by Kazakhstan (18.1%), Russia (11.23%), Canada (9.55%) and more. The outage in Kazakh sank the majority of Bitcoin’s computational power. It directly affected the asset’s price, sending it to around $43K during the period.
Bitcoin was trading at a much worse price level in contrast to that, but more on it later. The outage unveiled the real position Kazakhstan holds with respect to crypto mining. BTC mining in the nation became a matter of concern globally due to the negative impact it delivers to the environment.
The International Energy Agency reported that the country emits around 1,500g of carbon dioxide per kW/H. According to The Guardian, Kazakh authorities were looking for a crackdown on “gray” miners who were estimatedly consuming more energy than “white” miners. Country’s ministry said in 2021 that gray mining may take up to 1.2 GW power.
Recent market downturn has decreased people’s trust in the crypto industry. Financial Times reported that Core Scientific, a NASDAQ-listed Bitcoin mining company, may file for bankruptcy due to the unfavorable market conditions. The current crypto landscape may not support the miners, but several miners still believe in the crowned asset following the next BTC halving in April 2024.
Bitcoin was trading at the market value of $16,974 at the publication time, down by 1.92% in a week.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
