The Kazakh government is restricting crypto mining due to the power shortage in the country. Activity is blamed as the primary cause of this problem. According to reports, miners there are taking advantage of the cheap electricity tariffs due to the raid in China. All in all, the government’s moves seem fair, but it is incorrect to attribute the entire power shortage problem to mining.
How is crypto mining affecting Kazakhstan’s electricity needs?
Due to the recent action in China, miners have migrated to Kazakhstan due to the low electricity prices there. All of this has resulted in a 7% increase in electricity demand in the country. This has created a power shortage that is becoming a major problem there. Even the country’s energy minister said the rising demand was due to the increase in cryptocurrency operations in the country. He also said that this increase is quite large. This is probably why they are unable to meet the demands of the masses.
To counter this situation, they plan to reduce the miners’ consumption when there is a power shortage. Even if this will affect the miners, the government doesn’t care much about it. This is because crypto mining doesn’t really benefit them. Miners take advantage of the low prices in the country and the minted currency is sold and profits are taken abroad. Overall, Kazakhstan in no way benefits from this.
While they plan to develop the crypto mining industry in the country, due to the increasing demand, they need to solve the power consumption problem first. To do the same, they evaluate a solution. The government plans to limit electricity consumption by existing miners in the country. At the same time, they will not allow new miners to connect to the electricity grid.
In order to solve the electricity problem more adequately, Kazakhstan plans to build power plants with a capacity of over 3000 megawatts in the next 5 years. These power plants will run on gas, but the government will also focus on renewable energy sources. With excess energy, the government can focus on new initiatives in the crypto space and give the crypto mining industry room to breathe.
What do you think of Kazakhstan restricting crypto mining? And do you think this will change as more power plants are built? Let us know in the comments below. Even if you found our content informative, please like it and share it with your friends.
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