Violent protests against Kazakhstan’s government led to intermittent internet blackouts for a second day as troops from a Russian-led military alliance arrived in the country to restore order. The lack of connectivity has disrupted huge cryptocurrency mining operations in the country, which has become one of the world’s largest centers for this activity.
The creation or mining of Bitcoin and other cryptocurrencies is an energy-intensive process in which vast computer networks compete online for newly minted cryptographic tokens. After Chinese authorities cracked down on crypto mining last year, miners were forced to look elsewhere for cheap energy. Coal-rich Kazakhstan has become a popular alternative.
However, the current unrest there increases the risks and costs of operating in the country and could drive mining groups away. The Kazakh government, which first welcomed the crypto miners, was already wary of the activity, which was taxing the country’s energy grid.
Deadly street battles in Kazakhstan began with protests over soaring fuel prices. After the country’s largest telecommunications company shut down internet access across the country on Wednesday afternoon, processing activity on Bitcoin plunged. Hashrate, a measure of global computing power devoted to cryptocurrency mining, fell more than 10% after the breakdown.
Kazakhstan accounted for around 18% of global hashrate in August last year, according to the latest data compiled by the Cambridge Center for Alternative Finance.
The price of bitcoin and many other cryptocurrencies has fallen sharply since Wednesday afternoon, when the Federal Reserve signaled that it may withdraw support for the US economy faster than expected, which also affected markets. scholarship holders. Bitcoin price, which started the year at around $49,000, is currently trading around 12% lower at just over $43,000.