A follower of the crypto market remembers the demonstrations and the unstable situation in Kazakhstan and the extent of its impact on bitcoin mining, given that Kazakhstan ranks second in terms of bitcoin mining after the United States of America.
Kazakhstan is likely to lose its lead in the bitcoin hash rate in the next next hash rate update, according to industry experts.
According to the Cambridge Electricity Consumption Monitoring Index (CBECI), Kazakhstan had more than 18% of the world’s Bitcoin hash rate as of August 2021, ranking second only to the United States of America.
The marked increase in bitcoin mining capacity in Kazakhstan was partly driven by the mass exodus of Chinese miners due to China’s campaign against cryptocurrency trading and mining activity.
But even though many Chinese mining giants such as Canaan and BTC.com will move their operations to Kazakhstan in 2021, it is likely that Kazakhstan will lose its hashrate due to many reasons.
It is likely that the withdrawal of large companies in the field of bitcoin mining and affect the ranking of Kazakhstan and make it leave the first places in bitcoin mining in the next update, which is expected to be released in March.
Bitcoin mining will eventually decline in Kazakhstan whether as these companies pull out or because of the state of unsustainable energy subsidies.
Another reason for Kazakhstan’s loss of leadership in bitcoin mining is the country’s dependence on the oil and gas industry.
As noted at the beginning of the article, Kazakhstan experienced some significant instability in the hash rate due to the political turmoil in early January, with the resignation of the country’s cabinet and the government shutting down the internet for several days.
The political turmoil certainly goes hand in hand with potential energy price increases and new crypto-mining taxes which will surely make Kazakhstan less attractive to miners.
Miners are constantly in search of a jurisdiction that meets many criteria for long-term success, resulting in stable green energy supplies at long-term predictable prices, rule of law to protect operations, and a politically stable jurisdiction, among others.
Some Chinese mining giants are already showing signs of a possible turnaround and change in their expansion plans in Kazakhstan.
BIT Mining, one of the largest bitcoin miners that moved its operations from China to Kazakhstan in 2021, is canceling some of its mining plans in Kazakhstan, according to a February 17 report with the US Securities and Exchange Commission.
Ukraine officially passes a bill to legalize cryptocurrency
Cardano entered the list of the top 3 projects in terms of development in the cryptocurrency market