As protests spread across the Eurasian nation, Kazakhstan's government has cut off internet access leading to the halt of the country's bitcoin mining operations. A majority of Chinese miners have migrated in mass to Kazakhstan last year as the Chinese government began to crack down on the mining farms.
According to Cambridge Centre for Alternative Finance, Kazakhstan is the second-largest centre for mining operations after the USA. Kazakhstan contributes as much as 18% of the world's bitcoin hash rate. In April last year, before China's crackdown on bitcoin mining, Kazakhstan contributed just over 8%. Major pools including F2Pool, AntPool, and ViaBTC also saw declines in their hash rates.
The Bitcoin hash rate reduces if miners drop off the network, making it easier for the remaining miners to produce a new coin. The mining difficulty adjusts itself every two weeks based on the available hash rate. The more miners on the network, the greater the amount of computer power is needed to mine new bitcoin.
Kazakhstan's crypto mining farms are mostly powered by non-renewable sources mostly coal plants which are seen as a cause of global warming. While miners migrated to Kazakhstan due to its cheap electricity, the country found its resources strained. The Kazakh government last year planned to crack down unregistered "grey" miners who as per the government estimates might be consuming double the power as the "white" or officially registered ones does.
In recent months Kazakhstan's new regime for cryptocurrency mining has established a new registry under the Kazakh Ministry of Digital Development. As per a report by the crypto research portal The Block, 146 firms involved in crypto mining have registered with the authority.