When Denis Rusinovich established mining group Maveric digital currency in Kazakhstan in 2017, thought he had hit the jackpot. Along with China and Russia, the country had everything one could ask for Bitcoin mining: cold weather, legions of old warehouses and factories where they could install platforms mining and especially cheap dirty energy to power the process of electricity consumption. whereby the criptomoneda coined.
“This was a good opportunity,” says Rusinovich. When China banned cryptocurrency mining last June night, many country-based miners, who at the time accounted for 60 to 70 percent of the Bitcoin mining network, made the same call and hastily moved to Kazakhstan, bringing the country to 87,849. mining machines, according to a Financial Times estimation. Less than a year later, the initial buzz is history: miners are now facing frozen machines, popular unrest, and Russian troops roaming the country. And leaving is not an option.
Last week, Kazakhstan chaos as protests engulfed the south of the country on a rise in fuel prices led to police repression, the removal of former President Nursultan Nazarbayev, his role as head of the Security Council and off the internet. Russian troops led by acting under the orders of the CSTO, a military alliance of post-Soviet states, were deployed in the country. The impact of the shutdown of mining crypto-was evident Bitcoin network has lost 12 percent of its hashrate so far. Mellerud some hints, ideas digital currency analyst company Arcanum Research estimates that the closure alone would have cost $ 7.2 million Kazakh miners. For many miners, that was just the latest in a series of unfortunate circumstances that had pursued its operations for months. Those tempted to put back in the country by its low energy prices had found that its aging power grid was not prepared to handle the sudden influx of miners, which caused an increase in energy consumption. The government said that mining accounts for 8 percent of the capacity of the country. How to cope with blackouts and power outages in October 2021, the government announced that it would begin to ration power supply to the miners registered and disconnect if the network was subject to any kind of stress .
This means that, at best, cryptocurrency mining operations cease to operate during peak hours, when the general population turns on the heating due to the harsh winter. “From 6 to 11 p.m.[the power providers] sometimes they cut off electricity to our mining farms, “says Didar Bekbauov, founder of the Xive mining company.” That’s definitely a problem. Hopefully by the end of the winter season in March, we’ll be fine. “But in other cases, Rusinovich says,” it was no operation. ” they lost “tens of millions of dollars” a month due to power outages, and Bekbauov says his mines are about to reach equilibrium, but the weather poses an additional risk as it shuts down because the Condensation freezes instantly on Kazakhstan’s sub-zero mining machinery, which could damage the hardware. “[If the machinery is] immediately closed, if it’s cold, it freezes solid, “he says. To prevent the mother from freezing during the protests, many miners decided to spend money on extra security, says Alan Dorjiyev, president of the National Blockchain Association “I spoke to all the owners of the mining sector, and they told me that they have increased the security of the mining facilities, because the equipment is very expensive,” he says. he says, it was despite the fact that most of the mining operations are in the country’s energy-rich north, away from the hustle and bustle.
So why are there still? The answer is brutally who are trapped. All other major countries that have mining infrastructure criptomoneda, including Russia, Canada and the US are struggling with an acute shortage of adequate facilities. “It could be worse, just that there’s no room, there is capacity,” says Alex Brammer, vice president of business development of the mining company Luxor Tech. “Mining companies traded Americans are having significant problems to connect their miners at any time in the next three or six months.”