Miners in Kazakhstan are seeking a new mining hub after the country’s power failure. The European nation plunged into crisis mode after noting that it couldn’t handle the skyrocketing demands for electricity for the intense mining facilities.
Kazakhstan became a major crypto mining hub after China’s FUD in May. Crypto miners were forced out of the Asian country due to a reported massive power consumption. China’s affordable coal-dependent electricity in the Northern part kickstarted the mining boom, but when the country realized the harm the activity brought to the environment, it initiated the most intense crypto clampdown on miners.
Kazakhstan was amongst the many countries that harbored many of these miners. This act helped to boost the country’s share in the global mining output as well as brought in billions of foreign exchange earnings. However, the same power outage that drove miners out of China is reportedly forcing them out of the beloved Kazakhstan, as they search for a stable energy supply.
Surge In Mining Activities Causes Power Generation Issues
Kazakhstan is a country renowned for its gargantuan hydrocarbon deposits, but years of infrastructural neglect have limited the country’s power generation. The energy-intensive mining activity has gobbled up a large portion of the nation’s power, with the country revealing that it doesn’t have the capacity to handle crypto mining.
Authorities blame the recent catastrophes on the sudden rise in power consumption due to crypto mining. Before now, lawmakers advocated higher tariffs for miners to gain uninterrupted power supply for crypto mining. However, no word was communicated with the press regarding the proposal, suggesting that it might have been cast aside.
While the government tries to make the miners the scapegoat, the mining industry has refused to acknowledge the fact. According to them, infrastructural neglect is the sole cause of the power outages happening in the country. Some blame the unlicensed mining centers in the basement as one of the causes of the power outage, as they gulp a significant amount of power.
In November, the Blockchain body in Kazakhstan and the Data Center Industry had agreed with the nation’s grid management body to grant uninterrupted power supply to licensed miners. To date, the grid operator is yet to fulfill the part of the agreement, forcing the shutdown of mining hardware and the relocation of miners to countries with better energy supply.
Kazakhstan To Set Up Power Plants To Mitigate The Issue
Crypto mining has become a major source of revenue for the country. If the power issue persists and miners choose to relocate, the country is on the verge of losing close to $1.5B in the next five years and over $300M in tax revenues.
Presently, the country is on the verge of building power plants to curb the issue. The power plants are reportedly a combined capacity of 3000 MW. According to sources, a vast amount of the power will be generated from nuclear power and other green energies.