Kazakhstan has seen an influx of miners this year, leading to a strain on its electric grid. But where are these numbers coming from?
Source: businessinsider.com
China recently introduced stringent measures that have disenfranchised the crypto market within its borders. And with the community left voiceless, some members have chosen the exodus path to the east country of Kazakhstan. Making, Kazakhstan the safe business haven for miners and cryptocurrency traders.
And since Bitcoin mining, comes with an accompanying appetite for electric power, Kazakhstan is now bearing a massive electric situation. The country’s energy ministry has attributed an 8% increase in domestic power consumption to Bitcoin mining.
While addressing the power strain on Kazakhstan’s power grid, the vice-minister for energy said, “It cannot be delayed any longer.”
Kazakhstan’s Nuclear Solution
According to data from the Financial Times, Chinese companies have sent at least 87 849 Bitcoin machines over to Kazhakstan.
While not all these machines might be in use, those in use, are already contributing to a substantial increase in the power demand. Thus, leading to a deficit in the domestic power supply and unreliable electricity services.
This has led the country to consider the highest form of energy solution- nuclear energy.
In a meeting on Friday with bankers, President Tokayev discussed plans to build a nuclear power plant to ease the stress on the country’s electrical infrastructure.
“Looking into the future, we will have to make an unpopular decision about the construction of a nuclear power plant,” he said.
His announcment might receive some resistance though given the tense political situations the country has had in the past. In August 1949, Kazakhstan was rocked by a nuclear blast from the Russian Semipalatinsk atomic testing site. Moreover, the explosion did release 22 kilotons of TNT into the atmosphere.
This statement also comes after power shortages begun hitting parts of the country, forcing bitcoin companies like Xive to leave Kazakhstan.
Xive’s exit was announced on Twitter by Didar Bekbau, the co-founder of Xive, saying that he had to shut down his company’s mining farm due to “restricted electricity supply from the grid.”
Energy Supply Strains
Currently, the Asian country of Kazakhstan accounts for the 2nd largest contribution to the Bitcoin hash rate. And by the look of things, the government is no set plans to accomodate this. Not only to provide electricity but also at a low-cost, in the case of a surge in Bitcoin miners.
A recent report from Reuters attributes the high energy consumption levels to unregistered crypto miners. It also estimates that they could be consuming twice as much power as the registered miners, denying the government taxes and other fees that would enable it to provide cheap electricity.
Conclusion
Kazakhstan believes crypto mining will boost its economy by $1.5 billion over the next five years, thats according to the NABDC (Data Center Industry and Blockchain Association).
And, according to data by the University of Cambridge, Kazakhstan’s mining hash rate share has quadrupled over the past year. Making it the 2nd largest mining hub in the world after the U.S. Nuclear power might be the only solution to Kazakhstan’s power issues if the country still wantd to remain as a Bitcoin Mining giant.