Several Chinese crypto miners are getting kicked out again, though this time, it’s not Beijing that’s giving the order. It’s regions like Kazakhstan, which have seen a huge influx of miners from China following the nation’s decision that crypto mining is no longer an acceptable business within its borders.
Kazakhstan Doesn’t Have the Energy for All This
Regions such as Kazakhstan, Florida, and Texas were quick to offer homes to the many crypto miners that were forced to exit China a few months ago. The nation labeled crypto mining an illegal enterprise given that Beijing was on a mission to become more carbon neutral. As a result, mining companies situated on Chinese land were forced to close shop and find a new place to run their projects.
This has led to a lot of business in these new regions, but many of them do not have the electricity or energy capacity of China, and thus are suffering from shortages that are now forcing these miners to relocate once again.
Xive, for example, is a crypto mining firm located in southern Kazakhstan. Recently, the firm announced that it was barring its doors from entry and closing its business due to ongoing electricity shortages within the country. The firm put out the following statement:
Sad to shut down our mining farm in south [Kazakhstan].
The company’s founder and CEO mentioned in an interview that the nation was no longer strong enough to host crypto mining firms given that Kazakhstan utilizes a national energy grid that makes it hard to transfer energy to more needful areas. As a result, several firms situated within the country are now having to relocate themselves to nations like Russia and the United States.
This is a shame considering Kazakhstan holds a very high position in the digital currency mining ranks. The country is only second to the United States in terms of global bitcoin mining. At the time of writing, the nation accounts for more than 18 percent of the global mining hash rate. This is a huge boom from the less than nine percent figure the country held just six months ago.
Over the past two years, the country has invested millions of dollars into the crypto mining industry. Regulators were under the impression that the nation’s abundant supply of fossil fuels could potentially lure businesses from other corners of the world and boost Kazakhstan’s revenue. It was estimated that the country could earn roughly $1.5 billion in additional profit over the next five years primarily from bitcoin mining.
We Simply Can’t Do It
Murat Zhurebekov – the nation’s official deputy energy minister – explained that the energy crisis has since become too big to ignore. He mentioned:
Kazakhstan is not going to just watch illegal miners consume electricity and contribute to the shortage.