Civil Unrest In Kazakhstan Provokes Mass Internet Blackout, Shutting Down Bitcoin Mining
The second-biggest bitcoin mining country in the world lost internet access amid deadly violence across the country
What You Need To Know
Bitcoin miners have flooded Kazakhstan’s energy grid. In May 2021, the Chinese government banned all bitcoin mining, forcing miners to look elsewhere for operations. Due to its share border with China, Kazakhstan became a popular choice for relocation due to its cheap coal energy sources.
Kazakhstan accounts for ~18% of all bitcoin mining. Kazakhstan’s place among leading crypto mining countries sits extremely high, second only to the United States according to July 2021 data from the Cambridge Bitcoin Electricity Consumption Index.
Nationwide internet shutdown due to armed conflict across the country. The president of Kazakhstan ordered the national ISPs to cease operations, which has left the civilians and bitcoin miners with no access to the internet.
Bitcoin lives on. Although a large percentage of the blockchain’s miners were knocked offline, the protocols and infrastructure of Bitcoin successfully continued working, a demonstration of the stability and security the coin offers.
Violence and protests across Kazakhstan has led to the internet for the country being temporarily shut down by the government to help quell tensions and unrest. On Jan. 5, 2021, the president of Kazakhstan ordered the state internet provider to shut down operations which in turn caused bitcoin miners across the country to go offline.
Immediately, the hash rate of bitcoin, the computational power of the network, plummeted due to approximately 18% of the blockchain’s miners being shut off.
Didar Bekbau, Co-founder of Xive, a Kazakh based cloud bitcoin mining platform, tweeted updates on the situation and directly confirming that mining was offline for the country saying “no internet, no mining”.
With a large percentage of the network offline, Bitcoin dropped to prices around $43,000, the lowest the coin has been valued at in months. Additionally, many mining pools were reporting significant decreases in overall computing power, highlighting the significance of the Kazakh miner network. There are mixed reports on whether services have been restored or not.
The ongoing situation has provided an answer to a regularly debated and criticized aspect of Bitcoin in regards to its security reliance on miners and the internet. With a large percentage of miners and the 2nd largest bitcoin mining country offline, the network continued to work flawlessly and that is a large step in affirming trust within bitcoin and crypto communities worldwide. Additionally, this may lead to miners flocking to countries with more stable and secure societies and governments like the U.S., which is the largest bitcoin mining country in the world, to ensure the highest level of network security and profits. The lasting affects of the internet shutdown are unknown but the continuation of the network’s protocols and mechanics stand as sign of comfort against future fears if similar situations where to occur.