The overall computing power of the network bitcoin has dropped dramatically due to the shutdown of the Internet in Kazakhstan during a deadly revolt has affected the cryptocurrency mining industry, fast growing in the country.
Kazakhstan last year became the second world bitcoin mining center, after the United States, according to the Cambridge Center for Alternative Finance, after the main center, China will clamp down on mining activity in cryptocurrencies.
Russia sent paratroopers to Kazakhstan on Thursday to help quell the uprising across the country after the violence swept through the tightly controlled ex-Soviet state. The Police assured that he had killed dozens of rioters in the main city, Almatywhile state television said they had died 13 members of the Security Forces.
On Wednesday the Internet was closed across the country, in what the Netblocks monitoring site called “a nationwide internet blackout.”
This measure would have prevented miners from Kazakhstan from accessing the bitcoin network.
This is how bitcoin is created
The bitcoin and other cryptocurrencies are created or “mined” by computers high power, usually in data centers in different parts of the world, competing to solve complex math puzzles in a process that requires high energy consumption.
As of August last year, the most recent data available, Kazakhstan accounted for 18% of the “hashrate” world, cryptocurrency lingo to refer to to the amount of computing power used by computers connected to the bitcoin network.
In April, before the last measures of China on mining bitcoins, the figure was only 8%.
The hashrate of the main pools cryptocurrency mining -groups of miners in different places that team up to produce bitcoin-, including AntPool and F2Pool, was Thursday at 12:15 GMT around a 14% below its Tuesday level, according to data from mining company BTC.com. Neither pools responded immediately to a request for comment from Reuters.
STRENGTHENING MEASURES AGAINST CRYPTOCURRENCY MINING
However, a drop in the hashrate it is not necessarily a support for the price of bitcoin.
The bitcoin fell below $ 43,000 on Thursdaytesting multi-month lows after investor appetite for riskier assets fell as the US Federal Reserve leaned toward more aggressive policy action.
The more miners on the network, the greater the amount of computing power required to mine new bitcoins. The hashrate It drops if miners leave the network, which in theory makes it easier for the remaining miners to produce new coins.
Kazakhstan’s cryptocurrency mining farms are primarily powered by coal plants aging that, along with the coal mines and entire cities built around them, are a headache for the authorities in their attempt to decarbonize the economy.
The Kazakh government indicated last year that it planned to take action first against unregistered “gray” miners who, according to its calculations, they could be consuming twice as much energy as “white” or officially registered ones.
The Ministry of Energy declared last year that the “gray” mining could be consuming up to 1.2 GWt of energy, which together with the 600 MWt of the “white” miners account for approximately 8% of the total generation capacity of Kazakhstan.
The country’s uprising began with protests in western Kazakhstan against a fuel price hike on New Year’s Day.