Kazakhstan blocks crypto mining until next month
The crypto market is facing several issues, and it will not recover for several days at the very least as crypto mining is banned in Kazakhstan.
Kazakhstan has been ravaged by violence, instability, and turmoil after riots took place in light of surging oil prices, and the situation in the country took its toll on Bitcoin mining, drastically affecting the prices of cryptocurrency, chiefly the biggest of them all, Bitcoin.
The government of Kazakhstan has halted the mining of cryptocurrencies through the rest of January. The mining ban implemented on Tuesday preceded the major blackouts that regions of central Asia have suffered from on Wednesday.
Cryptocurrency miners have been barred from using the nation's energy from January 24 till the 31st.
KEGOC, the state-run power grid operator, said companies mining cryptocurrencies would no longer be allowed to do so until February 1.
The move was later followed by blackouts that spanned Uzbekistan, Kazakhstan, and Kyrgyzstan. The blackouts were brought about by the disconnection of one of Kazakhstan's major power lines.
The region's power grid is interconnected, meaning the blackout deprived millions of electricity or water.
The Kazakhstani power infrastructure has been suffering from issues for months at this point, and the winter is exacerbating the issue and posing a problem for Bitcoin mining, as it requires substantial energy requirements.
The nation's struggles have prompted KEGOC to limit the amount of power provided to mining facilities.
The rapid increase in mining in Kazakhstan was mainly due to China banning cryptocurrency in the summer, leading the Central Asian nation to be at the helm of Bitcoin mining globally, sitting at number two globally.
However, many Bitcoin miners remain unregistered with the Kazakh government.
A bit of background:
Kazakhstan had declared a state of emergency, imposing internet blackouts in the country in response to riots that broke out in the country, characterized by terrorist acts such as decapitating police officers.
Messenger apps Telegram, Signal, and WhatsApp were down in Kazakhstan as thousands took to the streets to protest against oil prices and the government.
The move heavily impacted Bitcoin, which dipped to its lowest price in six months just yesterday, just under the $35K threshold.
The Kazakhstani government limiting the energy-intensive Proof-of-Work mining comes amidst concerns from several nations, as a major EU regulator called for banning Proof-of-Work mining last week, and the next day, the Bank of Russia proposed a total ban on all cryptocurrency-related activities.
The latest decision will further impact Bitcoin, which has a hold on the entire crypto market, which means cryptocurrencies are expected to take an even bigger hit until the resumption of mining activities, which will take several days.