What just happened? China’s crackdown on cryptocurrency mining has impacted more than just the Asian nation. Cryptocurrency miners in Kazakhstan, many of whom came from China, caused an electricity crisis in the country, prompting its power grid operator to start rationing electricity.
The Financial Time reports that Kazakhstan’s electricity demand has grown by around eight percent this year, far more than its usual average growth rate of one to two percent. The surge has led to power shortages, blackouts in six regions of the country since October and shutdowns of three power plants.
Power grid operator KEGOC has now announced it will ration power to 50 registered crypto miners. They will also be the first to be disconnected in the event of a network failure.
Kazakh officials say much of the increase in power consumption is the fault of “gray miners,” unregistered crypto miners who operate from homes or factories. They are estimated to be responsible for consuming 1,200 megawatts (MW) of electricity from the country’s power grid.
Starting next year, registered miners will be charged a compensation fee of 1 tenge (approximately $ 0.0023) to remedy the situation and identify illegal miners. Kazakhstan is also considering nuclear power as a way to meet demand for electricity and has asked Russian energy company Inter RAO to contribute to the country’s national electricity grid.
A little sad to close our mining farm in southern KZ. The last container is ready to be sent. So much work, people, and hopes are ruined. The country risk has played out pic.twitter.com/J8ZMg6GeUI
– Didar (@didar_bekbau) November 24, 2021
Counter reports that mining company Crypto Xive recently closed a 2,500 rig mine in southern Kazakhstan due to a lack of sufficient energy supply. “It is clear that mining in southern Kazakhstan is no longer possible,” co-founder Didar Bekbau told the publication.
The Times estimates that more than 87,849 “energy-intensive” mining rigs have been moved from China to Kazakhstan as a result of the premiere crackdown on mining and its statement that all crypto transactions are illegal. However, some argue that miners have become the scapegoats for problems with Kazakhstan’s power grid.
Another place that has seen an influx of crypto miners from China is Sweden. Bitcoin mining energy consumption in the Scandinavian country increased by several hundred percent between April and August. The environmental impact prompted Sweden to call for a Europe-wide ban on all crypto mining.
