Recently, the unrest in Kazakhstan has become the focus of attention. As the unrest gradually got out of control, it caused power outages in the country's two largest cities, Almaty and Astana. Affected by this situation, the global bitcoin market once collapsed, with about 120,000 people liquidating their positions, causing a large number of miners to lose 300 million US dollars. If you’re wondering how to manage bitcoin investments visit this link to learn how.
2022 Kazakhstan Unrest
Tens of thousands of demonstrators gathered in the streets of Kazakhstan. It was the largest rally in the country since independence in 1991 when demonstrators burned and destroyed many places. For example, they burned down the town hall in Almaty. They also seized the airport in the capital and many other big cities. Police and other government officers' cars were set on fire.
More than 350 people have been injured and more than 2,000 arrested so far, although how many civilians were killed or wounded is unclear. Any But, the latest official has come out to clarify that also killed dozens of people the night before Thursday, January 6. The BBC said more than 1,000 people had been injured, with 400 hospitalized and 62 in critical condition.
Impact on Bitcoin Mining
Kazakhstan is the second-largest Bitcoin mining farm globally, with a hash rate of 18% in the global market, second only to the United States. So, how significant is the impact? First, you must know that after the blackout in Kazakhstan, the price of Bitcoin fell directly to around $40,500, a drop of more than $7,000 within a week. With the restoration of power in Kazakhstan, the price of Bitcoin has only recovered to $41,000, close to around $42,000. What's more serious is that after the rioters stormed the city government building in Almaty, the local Internet was interrupted because of the country's power outage. Even social media, instant messaging, and websites all stopped services. In addition, according to relevant media reports, after the power outage in Kazakhstan, the global bitcoin computing power fell by 12%, and the business of many producers in the country suffered "Waterloo."
You must know that many recognized Bitcoin mining companies are in the country. The number reaches about 50, in addition to some unregistered small-scale mining practitioners. According to information provided by trustpedia.io/trading-robots/quantum-ai/ to the previous estimate of the size of Bitcoin mining farms in Kazakhstan, It will be about 1.5 billion US dollars worth of industry.
Why the power outage in Kazakhstan
The power outage in Kazakhstan will affect the global bitcoin market and even crash for a time. It happened because of the nation's position in this field. Another reason because about one-fifth of the world's computing power comes from within the country. It is conceivable that once the country loses power, how much impact it will have on the Bitcoin market. So why do many bitcoin mining farms choose to be in Kazakhstan? The biggest reason is that the price of electricity in the country is relatively low, and the electricity cost per kilowatt-hour is 0.055 US dollars, which is equivalent to 0.35 Yuan. This price is lower than the US electricity bill of 0.12 US dollars per kilowatt-hour, equivalent to 0.76 Yuan. Therefore, this is also why many mines choose to be located in Kazakhstan. However, with the increasingly severe environmental pollution caused by thermal power generation in Kazakhstan, limiting the amount of electricity used by mines may be necessary.
After all, it is reported that Kazakhstan has been one of the most carbon-intensive countries in the world in recent years, so the country must make changes to achieve its carbon neutrality goal. In this regard, Kazakhstan has decided that in 2022, all Bitcoin mining farms will obtain licenses by the quota and use this quota as a standard to provide electricity. It is just a bolt from the blue for those illegal miners. It is worth noting that from this year, Bitcoin practitioners will be included in the regular tax payment sequence.
In Huaqiang's view, Kazakhstan's move will undoubtedly accelerate the departure of Bitcoin mining farms from the country's homeland, thereby transferring them to the United States. It means that the latter will be forced to accept bitcoin miners, which will naturally impact the country's carbon neutrality goals. More importantly, if a large number of Bitcoin mining farms leave, Kazakhstan may not be able to maintain the position of Bitcoin's second-largest computing power center in the world.