Key facts:
They never thought they would have to face power and Internet cuts or popular unrest .
Many miners spent money on security to protect farms during the protests.
A few months after China banned Bitcoin mining, Kazakhstan emerged as the second territory, after the United States, with the highest concentration of mining power or hash rate of the network. The Central Asian country welcomed many miners who fled the crackdown. They arrived full of optimism, but today their situation is different, since their future is uncertain.
In less than a year, a cluster of unfortunate events has affected the miners who are deployed in the region. They believed they had everything a Bitcoin network soldier could need: a cold climate, legions of old warehouses and factories where their equipment could be installed, and especially very cheap power. But, they never thought that they would have to deal with power and Internet cuts, popular unrest and Russian troops roaming the country, which has affected mining production, as it reported first CriptoNoticias.
More than 87,800 Bitcoin mining equipment would have entered Kazakhstan from China since June of last year, according to an estimate from the Financial Times. Therefore, the country’s electricity demand has increased by around 8% since the beginning of 2021, a strong increase compared to the 1 or 2% annual growth that it usually experiences.
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In fact, last year government officials singled out Bitcoin mining for the problems it has been presenting its electricity network and, to deal with the shortage, the national operator KEGOC began cutting off electricity to some miners in September. This situation has affected mining operations for months.
«From 6 p.m. to 11 p.m. sometimes they cut the electricity to our mining farms,” said Didar Bekbauov, founder of the Xive mining company, according to
Recently, to protect to farms during the protests, many miners decided to spend money on additional security to protect their farms during the protests.
Alan Dorjiyev, president of the National Association of the Blockchain and Data Center Industry of Kazakhstan, said: “I spoke with all the owners of the mining sector and they told me that they have increased the security of the facilities, because the equipment is quite expensive” , as reflected in the aforementioned report.
Many believed that it was necessary to redouble security, although most of the mining farms are located in the north of the country, far from the turmoil of recent protests.
Mining Bitcoin in Kazakhstan, despite everything
Mining Bitcoin in Kazakhstan, despite everythingAll evil is concentrated in Kazakhstan at the moment, but some believe that they should stay there, even if they feel stuck. That’s what Alex Brammer, vice president of business development at mining company Luxor Tech, believes, speaking with Wired. He says that there is currently a shortage of suitable spaces for the location of mining farms in the United States , Canada or Russia.
Whoever gets a suitable facility and decides to move to another country from Kazakhstan will still need additional time and resources to move their equipment. Even some doubt that the effort is worthwhile, added the miner.
Bekbauov said that shipping ASICs to the US from Kazakhstan, for example, would take longer two weeks, and the trip could end up damaging the equipment. “Transporting used machines is more delicate because they are more vulnerable to damage,” he added.
Leaving Kazakhstan is not a option for Rusinovich. In fact, he has no plans to move his teams at the moment because he is concerned that, due to the current political tensions, travel in and out of the country becomes much more challenging
However, there are also those who believe that the political situation that Kazakhstan is going through at the moment could distract the government from continuing go ahead with the plan to regulate the mining industry, as Dorjiyev pointed out.
“Kazakhstan is not where the future is,” Rusinovich said. That is why it is not ruled out that a good number of miners will leave Kazakhstan with the idea of settling elsewhere. However, fear that the teams will remain in the Asian region, but will not be able to produce, with which the country would soon become the second China, even without wanting it.
Some miners prefer to stay in Kazakhstan than face the challenges of finding a new place to settle outside the country. Source: YouTube Reuters.
Latin America, open doors for Bitcoin miningWhile Bitcoin mining spaces are scarce in the United States, Canada and Russia, Latin America is emerging as one of the regions that offers the best conditions for miners.
In El Salvador, for example, there is already a “plan to offer facilities to mine Bitcoin with very cheap energy, 100% clean, 100% renewable and with zero emissions, taking advantage of volcanic activity”, such as was pointed out by Salvadoran President Nayib Bukele in the middle of last year.
El Salvador also has other sources that can encourage Bitcoin mining. Not only because the Central American country is building its fifth large hydroelectric plant, but also is building the largest wind farm in the region.
On the other hand, the company AES El Salvador inaugurated, in 2020, the Opico Power solar power plant, which generates 5.2 MWp of sustainable energy. The same company previously installed the Moncagua solar plant, and developed another similar project called Bósforo, which generates 100 MW of renewable energy through 10 solar plants.
Argentina also stands out as a Latin country with potential for Bitcoin mining. In fact, the Canadian company Bitfarms Ltd. is moving forward with its plans to build a gigantic Bitcoin mining center in this country a project he has been working on since October last year.
There is also Paraguay, whose government is interested in exploiting the mining business in its territory. In addition, due to the vast sources of hydroelectric energy –which is renewable and cheap– that the nation has, many now consider it “a paradise” for Bitcoin mining .
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