Kazakh authorities resigns, shuts down web amid protests, inflicting Bitcoin community hash charge to tumble 13.4%
Kazakhstan, the world’s second largest country in terms of bitcoin (BTC) mining hash rate, saw unprecedented political unrest on Wednesday due to a sharp rise in fuel prices. As a result, the country’s presiding cabinet resigned, but not before the state-run Kazakhtelecom shut down the country’s internet, causing network activity to drop to 2% daily high.
The move dealt a severe blow to bitcoin mining activity in the country. According to data compiled by YCharts.com, the total hash rate of the Bitcoin network decreased 13.4% in the hours after the shutdown, from around 205,000 petahashes per second (PH / s) to 177,330 PH / s. The country accounts for 18% of the bitcoin network’s hash activity.
Just days earlier, the Kazakh government had lifted price caps on liquefied petroleum gas, used as car fuel, to adapt to market conditions, which doubled the price overnight and sparked violent protests. At the time of publication, the Internet is not yet accessible in Kazakhstan. If extended, the consequences could be dire because, aside from internet services, the Data Center Industry & Blockchain Association of Kazakhstan expects the country to raise $ 1.5 billion from legal cryptocurrency mining (and another 1.5 billion US dollars) over the next five years Will generate billions of dollars from illegal) activities.
The country’s low energy prices have attracted both domestic and foreign companies to set up businesses for bitcoin mining. According to Global Petrol Prices, electricity in Kazakhstan costs an average of just $ 0.055 per kWh for businesses, a fraction of the $ 0.12 per kWh US businesses pay.