Bitcoin hashrate reduces due to protests in Kazakhstan
Kazakhstan, which ranks second in the total global Bitcoin mining hashrate, is experiencing major internet disruptions amid local protests against the government. Kazakhtelecom, the country’s largest telecom company, has turned off the Internet throughout the country. It was also reported that mobile communications have been shut down in some cities.
The problems with Internet access in the country began on January 4, and the network was disabled across Kazakhstan on January 5, as it was reported by NetBlocks. Therefore, miners were forced to suspend their activities temporarily.
In August of last year, the country took the second place in global Bitcoin mining. This followed when Chinese miners in large numbers moved production to the territory of Kazakhstan because of the ban on mining, which was implemented in China. The country has been chosen by crypto mining companies due to cheap electricity and large oil reserves.
However, in the late autumn, energy shortages rose in Kazakhstan, which made crypto mining companies begin to leave the country. A few mining companies have already moved their equipment to the USA and Russia. Analysts think that the volatile situation will only heighten the outflow of miners from the country.
The drop in mining volumes took a heavy toll on the cryptocurrencies prices. Larry Cermak, an expert at The Block, advanced the opinion that the following situation will not affect the value of bitcoin. However, his estimation turned out wrong. The rate of the most popular cryptocurrency slid to 43 thousand dollars. The price of Ethereum also slid to 3.5 thousand dollars.
The reason for the rebellion in Kazakhstan was a twofold price increase for liquefied gas. President Kassym-Jomart Tokayev gave the order to appoint a government committee to consider the issue. On January 4, it was reported that the government was ready to fulfill the rioters’ conditions and reduce prices. However, in the following days, protests took place all over the country, and the list of demands extended.
According to the latest update received from the Global Check service, the Internet has reappeared in some parts of the republic. Kazakhtelecom service provider has resumed wireline Internet operation. Aktau and Nur-Sultan are among the cities where the network connection has appeared. Still, an emergency rule has been declared nationwide.