The global computing power of the bitcoin network dropped sharply this week as the shutdown of Kazakhstan’s internet during a deadly uprising hit the country’s fast-growing cryptocurrency mining industry.
Kazakhstan became last year the world’s second-largest centre for bitcoin mining after the US, according to the Cambridge Centre for Alternative Finance, after China clamped down on crypto activity.
Russia sent soldiers into Kazakhstan on Thursday to help put down the countrywide uprising after violence spread across the tightly controlled former Soviet state.
Police said they had killed dozens of rioters in the main city Almaty, while state television said 13 members of the security forces had died.
The internet was on Wednesday shut down across the country in what monitoring site Netblocks called “a nation-scale internet blackout”.
Accessing Bitcoin network
The move would have prevented Kazakhstan-based miners from accessing the bitcoin network.
Bitcoin and other cryptocurrencies are created or “mined” by high-powered computers, usually at data centres in different parts of the world, which compete to solve complex mathematical puzzles in an energy-intensive process.
In August last year, the most recent data available, Kazakhstan accounted for 18% of the global “hashrate” – crypto lingo for the amount of computing power being used by computers hooked up to the bitcoin network.
In April, before China’s latest clampdown on bitcoin mining, the figure was just 8%.
Kazakhstan’s bitcoin mining operations are mostly powered by “super-dirty” old coal plants said to generate much worse emissions than operations did in China.
Separately, the French nuclear fuel supplier Orano said on Thursday that its uranium mining operations in Kazakhstan were continuing as they are in an isolated region away from areas hit by unrest.
Orano operates in Kazakhstan through a joint venture with national mining company Kazatomprom, and sourced nearly half of its uranium production from the country in 2020.
- AFP and Reuters, with additional editing by George Russell
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