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Kazakhstan’s power problems are being caused by cryptocurrency mining.

Cryptocurrency mining uses a lot of electricity, which is causing an issue in Kazakhstan. According to the Financial Times, the country’s electrical grid operator KEGOC has announced that it would begin limiting electricity to 50 registered miners after their demand reportedly triggered an emergency shutdown mode at three power facilities in October.

Kazakhstan's power problems are being caused by cryptocurrency mining. 2

According to the energy ministry, power demand has increased by 8% so far in 2021, compared to the more average one or two percent increase. Since October, six regions have experienced outages.

Power outages have been blamed on an increase in the number of unlicensed crypto miners who are illegally creating cash from their homes or even workplaces, according to officials and witnesses. China’s anti-cryptocurrency campaign might be partially to blame. Energy demand began to rise in early 2021, when mining corporations relocated from China, and it rose again this May, when China made mining illegal. Kazakhstan’s electricity has been very cheap, giving it a refuge for enterprises seeking to generate higher profits from crypto activities.

Kazakhstan is attempting to make up for electricity shortfalls. It has asked a Russian energy business to augment the national electricity system, and starting in 2022, it will charge registered miners a compensation fee of 1 tenge (approximately $0.0023) per kilowatt-hour. Both attempts, though, will take time, requiring miners to either scale back or relocate equipment.

There are also concerns that the administration is not being forthcoming about its challenges. Luca Anceshi of the University of Glasgow told The Times that Kazakhstan was blaming miners for the country’s electrical grid’s dependability difficulties. Whether it’s true or not, it’s reasonable to argue that the mining demand foreshadows prospective challenges for other nations if their domestic crypto production takes off.

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