Now responsible for the second largest contribution to the Bitcoin hash rate, Kazakhstan’s power grid may not be prepared to handle the addition of many cryptocurrency miners from China and others seeking to capitalize on low cost electricity.
In a report released by Reuters on Wednesday, government officials in Kazakhstan estimate that unregistered crypto miners in the country could consume twice as much energy as those registered to avoid paying taxes and other fees. Together, all of the country’s crypto miners could use up to 1.2 gigawatts, or about 8% of Kazakhstan’s total power generation capacity.
Kazakhstan’s deputy energy minister Murat Zhurebekov said tackling potential strain on the country’s power grid “can no longer be delayed.” exactly they could be located.
Related: Kazakhstan Senate Approves Legislation Regulating Crypto Service Providers
With the exodus of crypto miners following a government crackdown in China, Kazakhstan and the United States are currently the countries responsible for the largest contributions to Bitcoin hash power (BTC). Large mining pools, including BTC.com and companies like Canaan, have moved across the border.
In June, President Kassym-Jomart Tokayev signed a law imposing additional taxes on energy used by cryptocurrency miners operating legally in Kazakhstan. The law would introduce an additional charge of $ 0.00233 per kilowatt hour, which is expected to take effect from January 2022.
According to data from Cambridge Center for Alternative Finance, Kazakhstan generated over 18% of the BTC network’s average monthly hash rate share in July, with the United States contributing over 35%. Cointelegraph reported in October that some estimates put cryptocurrency mining revenues in Kazakhstan at $ 1.5 billion over the next five years.