Bitcoin Mining Energy Crisis: Kazakhstan Towards Nuclear Solution

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2021-11-26 06:49:47

The country has seen a large influx of miners this year, but could have to sacrifice huge tax revenue from Bitcoin miners if the grid problems are not resolved.

The migration of Bitcoin miners from China to Kazakhstan has contributed to the energy crisis that the president of the Central Asian country has proposed to solve with nuclear energy.

The Kazakhstan Ministry of Energy has attributed an 8% increase in electricity consumption in the country throughout 2021 to Bitcoin miners. The country has received at least 87,849 Bitcoin miners from Chinese companies so far this year following China’s crackdown on cryptocurrency mining, according to data from the Financial Times.

The dramatic increase in demand has led to a shortfall in the domestic electricity supply and contributed to unreliable electricity service, according to the Electricity Corporation operating company Kazakhstan Grid. President Tokayev told bankers at the November 19 meeting that he thinks building a nuclear power plant will help ease the strain on his country’s electricity infrastructure:

“Looking to the future, we will have to make an unpopular decision to build a nuclear power plant.”

Although Tokayev does not connect the proposal to Bitcoin mining energy use, failure to keep miners in the country could jeopardize the estimated $1.58 billion in tax revenue that miners which exploits represent. Power shortages forced the Bitcoin Xive mining market to move out of Kazakhstan. Didar Bekbau, co-founder of Xive, said in a November 25 tweet that he had to close his company’s mining farm due to “limited power supply from the grid.”

Kazakhstan is currently home to 50 registered crypto miners and an unknown number of unregistered companies.

The decision to build new nuclear power plants is a serious one in a country that has suffered a severe radioactive fallout from weapons testing during the Soviet occupation. Kazakhstan’s last nuclear power plant closed in 1999.

About 88% of Kazakhstan’s electricity now comes from fossil fuel-fired power plants.

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