816 total views
This year, the country experienced a large influx of miners, but if power grid concerns are not rectified, the country may have to forego the enormous tax money generated by Bitcoin miners.
The influx of Bitcoin miners from China into Kazakhstan has exacerbated an energy shortage, which the president of the Central Asian country has proposed resolving with nuclear power.
Bitcoin miners are blamed by Kazakhstan’s Ministry of Energy for an increase of 8% in domestic electricity use in 2021. According to data from the Financial Times, the country has acquired at least 87,849 Bitcoin mining devices from Chinese companies so far this year, after China’s crackdown on crypto mining.
The substantial increase in demand has led to a deficit in the domestic power supply and contributed to unreliable electricity services, according to the Kazakhstan Electricity Grid Operating Company. President Tokayev told bankers at a Nov. 19 meeting that he thinks building a nuclear power plant will help ease the stress on his country’s electrical infrastructure:
“Looking into the future, we will have to make an unpopular decision about the construction of a nuclear power plant.”
While Tokayev made no mention of Bitcoin mining power usage in his proposal, failing to keep miners in the country might imperil the estimated $1.58 billion in tax income they generate. Xive, a Bitcoin mining marketplace, has previously left Kazakhstan due to power constraints. Didar Bekbau, co-founder of Xive, tweeted on Nov. 25 that his company’s mining farm had to be shut down owing to “limited electrical availability from the grid.”
Little sad to shut down our mining farm in south KZ. Last container is ready to be sent. So much work, people, hopes are ruined. Country risk played out pic.twitter.com/J8ZMg6GeUI
— Didar (@didar_bekbau) November 24, 2021
Kazakhstan is now home to 50 registered crypto mining companies and an unknown number of unregistered ones.
The decision to build new nuclear power plants is a serious one in a country that suffered severe nuclear fallout from weapons testing during Soviet occupation. Kazakhstan’s last nuclear power plant closed in 1999.
About 88% of Kazakhstan’s power currently comes from fossil fuel-burning power plants.