Bitcoin mining operations in Kazakhstan have been dealt a heavy blow following an internet shutdown that has left the country’s miners unable to connect to the global network.
Bitcoin prices plummeted on Thursday after the internet in Kazakhstan was shut down amid intensifying violence. Last year, the nation became the world’s second-largest center for bitcoin mining after the United States, according to data from the Cambridge Centre for Alternative Finance, after China clamped down on crypto mining activity.
According to Fortune, Kazakhstan has been hosting 18% of global bitcoin mining. However, within hours of the outage, bitcoin’s computational power sank.
The hash rate rises if miners join the network, in theory making it more difficult for the remaining miners to mine new coins.
According to data from mining firm BTC.com, the hash rate at major crypto mining pools – groups of miners in different locations that team up to produce bitcoin – was down 8% from Tuesday to Thursday, according to data from mining firm BTC.com. Bitcoin’s price, too, took a plunge – a drop in hash rate doesn’t necessarily boost the price.
The outage reinforced how much weight Kazakhstan has in the bitcoin ecosystem. Economics aside, bitcoin’s negative environmental impact has been an ongoing issue.
In Kazakhstan, the power behind bitcoin is a cause for concern. The country’s crypto mining farms are powered mainly by aging coal plants, which themselves – along with coal mines and whole towns built around them – are a headache for authorities as they seek to decarbonize the economy.