Kazakhstan, the second largest country in the world in terms of bitcoin (BTC) mining speed, experienced a unique political turmoil on Wednesday due to soaring fuel prices. As a result, the government that presides over the country left, but not before the Kazakh state-owned company Telecom turned off the country’s Internet, causing network activity to fall to 2% of its daily high.
The move dealt a major blow to bitcoin mining in the country. According to data compiled by YCharts.com, the overall hash rate of the Bitcoin network dropped 13.4% in the hours after the shutdown, from approximately 205,000 petahashes per second (PH / s) to 177,330 PH / s. The country accounts for 18% of the hash activity of the Bitcoin network.
Just a few days ago, the Kazakh government raised the price ceiling for liquefied petroleum gas (LPG), used as a vehicle fuel, to adjust to market conditions, doubling the price overnight, sparking violent protests. At the time of publication, the Internet is not yet available in Kazakhstan. If expanded, the implications could be dire because, in addition to internet services, the Kazakhstani data center and industry association expect the country to generate $ 1.5 billion from legal crypto mining within a year (and another $ 1.5 billion from illegal activities). the next five years.
Low energy prices in the country have attracted both domestic and foreign organizations to create a store for Bitcoin mining. Based on world oil prices, electricity in Kazakhstan costs an average of only $ 0.055 per kilowatt hour for companies, which is a fraction of the $ 0.12 per kilowatt hour paid by American companies.