Miners leave Kazakhstan due to electricity woes
Mining company Xive has shut down a cryptocurrency farm with 2,500 rigs due to energy shortages in Southern Kazakhstan. Xive co-founder Didar Bekbau said that mining in this region is impossible. The company plans to open a mining farm in the USA.
There are problems with electricity in the southern part of Kazakhstan, partly caused by the influx of miners from China, where mining was banned. The national grid cannot provide electricity transfer from the north region of the country, where the main part of Kazakhstan’s power plants is located. There have been energy shortages in the region since September. Coal plants suffered from power outages, which aggravated the situation.
Hence, some crypto mining companies, such as Xive and Enegix, were forced to leave Southern Kazakhstan. According to Bekbau, several mining companies have already moved their equipment to Russia and the USA.
Last month, the Ministry of Energy of Kazakhstan issued a decree that limits the consumption of electricity by miners to a total of 100 megawatts. This restriction does not apply to licensed cryptocurrency farms.
This summer, Iran faced a similar problem. Due to high pressure on the country’s power grid, the former president of Iran placed a ban on mining. But in the autumn licensed mining companies were allowed to return to work.
Recently, the government of Kazakhstan announced that the law on cryptocurrency mining should be finalized. The President of the country Kassym-Jomart Tokayev ordered to resolve issues related to mining at the legal level.
Minister of Energy Magzum Mirzagaliyev said that the appropriate authorities in Kazakhstan are fighting against illegal miners. Earlier, the government of Kazakhstan considered the possibility of introducing a tax on the use of electricity for miners.
According to Mirzagaliyev, the cryptocurrency industry has great potential, so legal mining farms will not be subject to restrictions. However, crypto mining should not jeopardize the energy grid of the country. Legal mining companies produce an income of about $230 million a year to the state budget.
According to Cambridge Centre for Alternative Finance, Kazakhstan ranks second in global Bitcoin mining. The USA is in the first place, and Russia is in the third place.