The second-biggest country for bitcoin mining lost its internet access, taking as much as 15% of the network offline.
As the Central Asian nation of Kazakhstan plunged into chaos this week, an internet shutdown hit the world’s second-biggest bitcoin mining hub, in yet another blow to miners searching for a permanent and stable home. Less than a year ago, China banished all of its cryptocurrency miners, many of whom sought refuge in neighboring Kazakhstan. But months after these crypto migrants set up shop, protests over surging fuel prices have morphed into the worst unrest the country has seen in decades, leaving crypto miners caught in the middle. After sacking his government and requesting the aid of Russian paratroopers to contain the fatal violence, president Kazakh President Kassym-Jomart Tokayev ordered the nation’s telecom provider to shutter internet service. That shutdown took an estimated 15% of the world’s bitcoin miners offline, according to Kevin Zhang of digital currency company Foundry, which helped bring over $400 million of mining equipment into North America. As Kazakh miner Didar Bekbau put it, „No internet, so no mining.“ Bitcoin dropped below $43,000 for the first time since September in trade on Thursday, falling over 8% at one point. Internet service has since been restored in the country, but the entire episode lays bare two significant facts about the state of the bitcoin mining industry. For one, the bitcoin network is resilient to the point that it doesn’t skip a beat, even when a substantial portion of miners are unexpectedly taken offline. Second, the U.S. may soon see a fresh influx of crypto miners looking to avoid future disruptions. The question now is whether the U.S., which eclipsed China as the planet’s largest bitcoin mining hub in 2021, has the room to take in any more miners. „What’s concerning is that previous congestion and bottlenecks around hosting capacity (readily available space to plug machines into) will be squeezed that much tighter,“ explained Zhang. „There’s a tremendous amount of pressure and demand for hosting capacity,“ he said.
