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Increased BTC Mining Will Lead Kazakhstan To Turn To Nuclear Energy

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An increase in BTC mining is causing electricity shortages in Kazakhstan. With that, the country, which is considered rich in energy, is studying the possibility of using nuclear energy to maintain the activity.

After China banned the mining of BTC and other digital assets, miners began to migrate to other countries and Kazakhstan was one of them.

Today, the Central Asian nation is second only to the United States in terms of global cryptocurrency production.

More precisely, Kazakhstan’s share of the global hash rate has increased to 18.1%, according to the latest data from the Cambridge Center for Alternative Finance. That’s a fourfold increase from the previous year.

BTC Mining in Kazakhstan

As reported by the Nikkei Asia portal, this increase was, in part, intentional. That’s because the country created a favorable environment for mining by establishing a legal framework for the industry in July 2020.

Now Kazakhstan is eager to reap the financial benefits. The legislation, associated with excess energy, made the country a privileged destination for companies that moved from China.

However, the high energy consumption of mining is becoming an issue. In a normal year in Kazakhstan, energy consumption grows between 1% and 2%.

But so far this year, there has been “abnormal growth” of 8%, according to Murat Zhurebekov, the country’s deputy energy minister.

In October, Kazakhstan Electricity Grid Operating Company (KEGOC) partially attributed the decline of three power plants to increased demand for mining.

With the crisis, President Kassym-Jomart Tokayev is considering using nuclear energy to maintain mining:

“Looking to the future, we will have to make an unpopular decision about building a nuclear power plant,” he said at a meeting with bankers.

Power rationing for miners

Meanwhile, KEGOC is rationing the power supply to 50 mining companies officially operating in the country.

These companies pay taxes and have agreements with the network operator. However, there are several other unregistered miners operating in a “grey area”.

In that sense, curbing this irregular activity is crucial to Kazakhstan’s long-term energy security, according to Alan Dorjiyev, president of the Kazakhstan Data Center and Blockchain Industry Association.

Beginning in 2022, the state will introduce a new tax of $0.0023 per kilowatt-hour used by registered businesses.

In this way, the country hopes to increase tax collection and make electricity needs easier to predict.

Turkish lira collapses massively: Investors are fleeing in BTC

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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