Bitcoin network's computing power drops drastically due to internet shutdown in Kazakhstan
There has been a big reduction in the global computing power of Bitcoin. The reason for this is the internet shutdown due to violence in Kazakhstan this week. Russia sent troops on Thursday to control the rebels in Kazakhstan. Kazakhstan police said dozens of rebels had been killed in the city of Almaty.
According to a Reuters report, the internet was shut down in Kazakhstan on Wednesday. Monitoring site Netblocks called it "a nationwide Internet blackout". This made it difficult for Kazakhstan's crypto miners to access the bitcoin network. According to the Cambridge Center for Alternative Finance, Kazakhstan became the second largest bitcoin mining center after the US last year. China's tightening of bitcoin mining has increased its mining in Kazakhstan.
Bitcoin and other cryptocurrencies are mined or created on high powered computers. This mining takes place at data centers in different parts of the world. These data centers compete to solve complex mathematical equations. This process consumes a lot of electricity.Despite the impact on bitcoin mining, the price of bitcoin fell significantly on Thursday and went below $43,000. Investors sold off high-risk assets after the US Federal Reserve signaled to raise interest rates. This has had an impact on cryptocurrencies including bitcoin.
Crypto mining centers in Kazakhstan also consume a lot of electricity. In Kazakhstan, coal-fired plants are used for electricity generation. This is a major cause of pollution. The Kazakhstan government said last year that it was preparing to crack down on unregistered crypto miners.They are estimated to consume almost double the electricity consumption as compared to the registered miners. Kazakhstan's energy ministry reported last year that unregistered miners are consuming up to 1.2 GWt of electricity. Apart from this, the consumption of registered miners is about 600 MWt. Crypto mining accounts for about 8 percent of the total electricity generation capacity in Kazakhstan.European country Kosovo has banned crypto mining due to high consumption of electricity. In some other countries also, there is a shortage of electricity due to crypto mining.